Frequently Asked Questions

Who is a Registered Real Estate Agent?

 

  • Estate Agent is a person who is registered with The Board of Valuers, Appraisers & Estate Agents, Malaysia (herein known as “The Board”).
  • The registered real estate agents are regulated by The Board and they come under the purview of the Ministry of Finance.
  • An agent is acting or holding oneself out to the public as ready to act, for a commission, fee, reward or other consideration as an agent in respect of the sale, other disposal, acquisition, leasing or letting of any properties including but not limited to land, buildings, residential house, apartments and condominiums.
  • The agents will employ negotiators who are real estate salespersons. All negotiators are required to work on a full time basis with a real estate firm.
What are the procedures of buying a property?

 

  1. Determine your budget and match it to the type of property that you desire
  2. Source for financing from a local bank
  3. It is vital to perform a background check on the developer
  4. Ensure that there are no further hidden costs to be incurred before the Sale & Purchased Agreement is signed.

 

  • It is recommended to seek assistance from a negotiator as they will assist you throughout the entire process of buying a property.
  • The negotiators will be able to provide you with the source of information for market trends and area of interest.
  • You should select your negotiators with a proven track record who can provide the best service to you and your family.
Housing loans – any guidelines?

 

  • The general rule of thumb is that the value of the property that you purchase should cost no more than 3 times of your annual household income. 
  • The monthly loan repayment should not exceed 1/3 of your gross monthly income.
  • The financial institution will also take into account your other liabilities including credit cards, hire purchase loans and/ or personal loans.
  • You may proceed to use the Loan calculator on our Home page for you to calculate your monthly repayment when you are considering to purchase a property.
  • The financial institution requires a valuation if you are buying a completed property to provide an indication the property is worth what you are paying for.
  • In general, you will need the following documents when applying for your loan (not exhaustive):-

If you are a salaried employee:
(a) Letter of appointment (for new employee);
(b) Latest three months’ salary slip;
(c) Latest three months’ bank statements to show the salary credited;
(d) EA form;
(e) EPF statement;
(f) Latest Income tax return form (Borang BE); and
(g) A photostated copy of your IC (identity card).

If you are self-employed:
(a) Latest income tax return form (Borang B);
(b) Latest two years’ audited accounts / trading accounts;
(c) Form 24 & 49 & Company Registration;
(d) Business registration form (A/D);
(e) Six months’ bank statements (personal account);
(f) 12 months’ bank statements (company account);
(g) A photostated copy of your IC (identity card); and
(h) Other supporting income documents.

  • There will be some costs involved in your application of the loan that you will have to pay.
  • Kindly confirm with the financial institution to obtain a better clarification of the charges involved.
What are the Professional fees chargeable by an Estate Agent?

 

  • Sale – maximum professional fees of 3% of the value of the property
  • For letting/ leasing:-

 

 

Duration of Tenancy

Maximum fee

Up to 3 years

1.25 months of gross rental

Exceeding 3 years up to 4 years

1.50 months of gross rental

Exceeding 4 years up to 5 years

1.75 months of gross rental

Exceeding 5 years (without renewal option)

1.75 months of gross rental

Exceeding 5 years (with renewal option)

1.75 months of gross rental plus 0.25 months of gross rental for each extra year

 

 

  • Claims are allowed for travelling, printing, copies of documents, advertisements, sign boards, etc.

Service Tax – 6% of Government Service Tax will be charged on all professional fees received as it is compulsory under the law to pay service tax for those using the services of the Real Estate firms.

Legal fees – what are the costs involved in respect of Stamp duty?

 

STAMP DUTY ON SALE/ LEASING OF PROPERTY

 

In the case of purchase of any property, the contract of sale and purchase is chargeable to ad valorem duty on the price of the sale transaction/ tenancy. The rate of duty is the same as that of Immovable Property (Stamp Act 1946 refers).

 

SALE OF PROPERTY

 

The prescribed rate of duty for sale transaction is as shown below:-

 

 

Value of the property

Stamp Duty Payable

First RM100,00

1%

From RM100,001 to RM499,999

2%

From RM500,000 above

3%

 

 

Note: The duty shall be paid by the Purchaser of the property.

 

LEASING OF PROPERTY

 

The lease or tenancy instrument which secures annual rent not exceeding RM2,400 is EXEMPTED from duty and presentation of these instruments at a stamping office or centre is not necessary.

 

The prescribed rate of duty on the instrument which secures annual rent exceeding RM2,400 is as follows:-

 

 

For every RM250 or part thereof in excess of RM2,400

Tenure

Rate of Stamp Duty

Not exceeding 1 year

RM1

Exceeding 1 year but not exceeding 3 years

RM2

Exceeding 3 years and above

RM4

 

Legal costs – what are the costs involved in respect of Real Property Gains Tax (RPGT)?

 

REAL PROPERTY GAINS TAX (RPGT)

Real Property Gains Tax (RPGT) is tax charged on gains arising from the disposal/ sale of real properties.

With effect from 1 January 2012, RPGT will be imposed at the effective rate of 10% on gains arising from the disposal of real properties within 2 years from the date of acquisition, for Sales & Purchase Agreement signed on or after that date.

The 5% rate will continue to apply for people selling in the third year through to the fifth year.

Calculation of RPGT

The calculation of RPGT is a follows; assuming that the property was purchased at RM400,000 and resold at RM500,000 within the first 2 years of its purchase;

Gain from disposal – waived exemption = Taxable gain

Eg. RM100,000 – RM90,000 = RM90,000

Chargeable RPGT is 10% of RM90,000 = RM9,000

 

Allowable loss

Allowable loss is a loss incurred after a property disposal and in this event tax relief is allowed under the following conditions:

  1. The disposal price is less than the earlier purchased price
  2. The disposal price is equal to the earlier purchased price.

 

Disposals not liable to RPGT

  • Disposal made after 5 years from the date of acquisition of the property
  • Gains on disposal
  • Gifts/ transfer of real property between:
    • Husband and wife
    • Parent and child
    • Grandparent and grandchild
  • Gains on disposal of residential property once in-a-lifetime for Malaysian citizen or permanent resident of Malaysia (Application for exemption must be made by filling up a Form under Section 8, RPGT Act 1976)

 

Please explain the withdrawals from Employees Provident Fund (EPF) in purchasing/ leasing a property.

Withdrawal to Reduce / Redeem Housing Loan

This withdrawal allows you to utilize your savings from Account 2 to reduce or redeem the balance of your’s or your spouse’s housing loan taken from a financial institution approved by the EPF for the following mode of purchase or construction of a house:

  • Individual purchase; OR
  • Joint purchase with spouse, family members or other individuals; OR

Withdrawal to reduce / redeem the balance of housing loan of the second house is allowed after the first house purchased utilizing EPF withdrawal has been sold or disposal of ownership of property has taken place. Disposal of ownership refers to 'loss of ownership of the first house owned by you either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.


Application Eligibility

  • A Malaysian Citizen; OR
  • A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
  • A Non-Malaysian Citizen who:
    • Has become an EPF member before 1 August 1998; OR
    • Has obtained a Permanent Resident status (PR).
  • You have not reached the age 55 at the time the EPF receives your application; AND
  • You have a minimum savings balance of RM500.00 in your Account 2.

Source from: http://www.kwsp.gov.my/index.php?ch=p2members&pg=en_p2members_wdrawtype&ac=40

 

Withdrawal to Purchase a House

PURPOSE

  • This withdrawal allows you to utilize your savings from Account 2 to partially finance your purchase of a house individually OR jointly with your spouse or close family members namely parents or siblings.
  • Buying of a house with another individual who has no kinship is allowed provided that the other individual is a buyer and borrower.
  • This withdrawal allows you to buy a house from a developer or an individual or through a public auction.
  • EPF Withdrawal to purchase a second house is allowed after the first house purchased utilizing EPF has been sold or disposal of ownership of property has taken place. Disposal of ownership refers to 'loss of ownership of the first house owned by you either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase'.

 

Application Eligibility

  • (i) A Malaysian Citizen; OR

(ii) A Malaysian Citizen who has made  Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR

(iii) A Non-Malaysian Citizen who:

  • Has became an EPF before 1 August 1998, OR
  • Has obtained a Permanent Resident (PR) status.
  • You have not reached the age 55 at the time the EPF receives your application; AND
  • You have a minimum savings balance of RM500.00 in your Account 2.

Source from: http://www.kwsp.gov.my/index.php?ch=p2members&pg=en_p2members_wdrawtype&ac=1850

 

Withdrawal to Build a House

  • This withdrawal allows you to utilize your Account 2 to partially finance the building of a house either individually OR  jointly with your spouse and family member(s). Proof of kinship is required to validate your joint purchase.
  • EPF withdrawal to purchase a second house is allowed after the first house purchased utilizing EPF withdrawal has been sold or disposal of ownership of property has has taken place. Disposal of ownership refers to ‘loss of ownership of the first house owned by you either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.

 

Application Eligibility

  • (I) A Malaysian Citizen; OR
  • (ii) A Malaysian Citizen who has made Leaving the Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
  • (iii) A Non-Malaysian Citizen who:
    • Has become an EPF member before 1 August 1998; OR
    • Has obtained a Permanent Resident status (PR).
  • You have not reached the age 55 at the time the EPF receives your application; AND
  • You have a minimum savings balance of RM500.00 in your Account 2.

Source from: http://www.kwsp.gov.my/index.php?ch=p2members&pg=en_p2members_wdrawtype&ac=1867

 

Housing Loan Monthly Instalment Withdrawal

This withdrawal allows you to utilize your savings from your Account 2 to pay for your monthly instalments of a housing loan taken for the purpose of buying / building a house.

This withdrawal is in addition to the withdrawal to reduce / redeem housing loan

Payments will be made via direct-crediting into your personal bank account. or will be sent to you in form of banker’s cheque payable to the financial institution concerned for those with Non Performing Loans (NPL).
 

Withdrawal Eligibility

  • (i)  A Malaysian Citizen; OR

(ii)  A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
(iii)  A Non-Malaysian Citizen who:

  • Has become an EPF member before 1 August 1998; OR
  • Has obtained a Permanent Resident status (PR)
  • You have not reached the age 55 at the time the EPF receives your application; AND
  • You have a minimum savings balance of RM600.00 in your Account 2.

Source from: http://www.kwsp.gov.my/index.php?ch=p2members&pg=en_p2members_wdrawtype&ac=2190

What are the Guidelines of buying property if you are a foreigner?

GUIDELINES

(as provided by the Economic Planning Unit)

  1. Acquisitions of property that do not require the approval of the Economic Planning Unit (EPU) (but falls under the purview of the relevant Ministries and/ or Government Departments) are as follows:-
    1. Commercial units valued at RM500,000 and above;
    2. Agricultural land valued at RM500,000 and above or at least five (5) acres in area for the following purposes:-
      • to undertake agricultural activities on a commercial scale using modern or high technology; or
      • to undertake agro-tourism projects; or
      • to undertake agricultural or agro-based industrial activities for the production of goods for export.
    3. Industrial land valued at RM500,000 and above; and
    4. Transfer of property to a foreigner based on family ties is only allowed among immediate family members.
  2. Residential unit valued at RM500,000 and above (this acquisition falls under the purview of the State Authorities).
  3. Residential units acquired under “Malaysia My Second Home”.

 

RESTRICTIONS

Foreign interest is NOT ALLOWED to acquire the following:-

  • Properties valued less than RM500,000 per unit;
  • Residential units under the category of low and low-medium cost as determined by the State Authority;
  • Properties built on Malay reserve land; and
  • Properties allocated to Bumiputera interest in any property development project as determined by the State Authority.
Generally, what is the completion period for properties under construction?

For landed properties such as bungalows, semi-detached houses and terrace houses, it is estimated that the expected date of completion is 24 months from the date of signing of the Sale and Purchase Agreement.

 

For subdivided buildings such as condominiums, flats, apartments and townhouses, the estimated timeline for completion is 36 months.

What are the payment schedules for Projects under Constructions?

 

Installments payable (for Link House)

%

1.

Immediately upon signing of this Agreement

1

2.

Within twenty-one (21) working days after receipt by the Purchaser of the Vendor's written notice of the completion of:

 

 
  • the foundation and footing works of the said Building

10

 
  • the reinforced concrete framework of the said Building

15

 
  • the walls of the said Building with door and window frames placed in position

10

 
  • the roofing, electrical wiring, plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling to the said Building

10

 
  • the internal and external plastering of the said Building

10

 
  • the sewerage works servings the said Building

5

 
  • the drain serving the said Building

5

 
  • the roads, drains and sewerage works serving the said Building

5

3.

On the date the Purchaser takes vacant possession of the said Building, with water and electricity supply ready for connection.

12.5

4.

Within twenty-one (21) working days after receipt by the Purchaser or the Purchaser's solicitors of the separate document of title to the said Lot together with a valid and registrable Memorandum of Transfer to the Purchaser duly executed by the Vendor or on the date the Purchaser takes vacant possession of the said Building, whichever is later.

2.5

5.

On the date the Purchaser takes vacant possession of the said Building as in item (3) and to be held by the Vendor's solicitor as stakeholder for payment to the Vendor as follows:-

5

 
  • two point five per centum (2.5%) at the expiry of six (6) months after the date Purchaser takes vacant possession of the said Building;

 

 
  • two point five per centum (2.5%) at the expiry of eighteen (18) months after the date Purchaser takes vacant possessions of the said Building

 

 

TOTAL

100

 

Installments payable [for sub-divided buildings (Strata) or Townvilla]

%

1.

Immediately upon signing of this Agreement

10

2.

Within twenty-one (21) working days after receipt by the Purchaser of the Vendor's written notice of the completion of:

 

 
  • the work below ground level including piling and foundation of the said Building comprising the said Parcel

10

 
  • the reinforced concrete framework and floor slab of the said Building

15

 
  • the walls of the said Parcel with door and window frames placed in position

10

 
  • the roofing, electrical wiring, plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling to the said Building

10

 
  • the internal and external plastering of the said Building

10

 
  • the sewerage works servings the said Building

5

 
  • the drain serving the said Building

5

 
  • the roads, drains and sewerage works serving the said Building

5

3.

On the date the Purchaser takes vacant possession of the said Parcel, with water and electricity supply ready for connection to the said Parcel

12.5

4.

Within twenty-one (21) working days after receipt by the Purchaser of the written confirmation of the Vendor's submission to and acceptance by the Appropriate Authority of the application for subdivision of the said Building

2.5

5.

On the date the Purchaser takes vacant possession of the said Parcel as in item (3) and to be held by the Vendor's solicitor as stakeholder for payment to the Vendor as follows:-

5

 
  • two point five per centum (2.5%) at the expiry of six (6) months after the date Purchaser takes vacant possession of the said Building;

 

 
  • two point five per centum (2.5%) at the expiry of eighteen (18) months after the date Purchaser takes vacant possessions of the said Building

 

 

TOTAL

100

 

 

Source from: http://www.tppt.com.my/paymentsc.html

 

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