SPA, Stamp Duty Malaysia, And Legal Fees For Property Purchase

SPA, Stamp Duty Malaysia, And Legal Fees For Property Purchase
SPA, Stamp Duty Malaysia, And Legal Fees For Property Purchase

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Wanting to buy your first property is always an exciting, and slightly nerve-racking, experience! Here are some reasons why:

  • You’ve done your research to find the perfect area surrounded by plenty of amenities (and the neighbours aren’t weird in any way).

  • You’ve prepared a solid budget that maps out your repayments, savings, and miscellaneous expenses.

  • You’ve also selected the right bank that will provide you with a 90% margin of finance with an attractive interest rate.

“Now, what could possibly go wrong,” you think. Well, A LOT, as it seems!

Before you can even take the last step to seal that sweet deal, you discover some additional ‘hidden fees’ you overlooked. Yep, apart from the property’s down payment, there’s also the following:

Image result for noooo gif
Image result for noooo gif

Suddenly, that carefully planned budget of yours is in chaos as you realise that you don’t have enough money to purchase your dream home after all. Boooo!

How Am I Supposed To Know What The Rates Are?

Well, if you wanna make sure the scenario above doesn’t apply to you, you’d better check out the list of rates we’ve compiled below for your reference.

They’ll show you what to expect when it comes to the additional payments you need to make. Hopefully, you won’t be caught off-guard and have to scramble to raise enough funds on time. You’re welcome!


If the list above doesn’t scare you off, then good for you, you’re ready for what is probably the biggest financial step you’ll ever make!

What Is A Sale and Purchase Agreement?

A Sale & Purchase Agreement (SPA) is a legally binding agreement between a seller and a buyer, outlining the details of the transaction such as terms and conditions, price of the property, and all the important details the seller should know about.

The SPA is a mutual agreement between both parties, hence, it cannot be further negotiated or amended, and canceling it will result in a 10% penalty of the purchase price. Always make sure you fully understand it before signing on the dotted line!

Other details you can find in the SPA are the manner of payment, defect liability period, house/unit plan, vacant possession, and various clauses.


What Is Stamp Duty?

Stamp duty is also known as a transactional tax, or fee, for stamping transactional documents such as loan agreements, tenancy agreements, and documents pertaining to property transfer, including the SPA!

It’s also a legal requirement and must be stamped within 30 days of the signing of the SPA, or you will need to pay a penalty of 5%-20% of the deficient duty.

Infographic on the sale and purchase agreement, stamp duty and legal fees for purchasing a property in Malaysia 2020
Infographic on the sale and purchase agreement, stamp duty and legal fees for purchasing a property in Malaysia 2020

How To Calculate Stamp Duty Fees

For Instrument of Transfer – Memorandum of Transfer (MOT) or Deed of Assignment (DOA):

Price of Property


First RM100,000


RM100,001 – RM500,000


RM500,001 – RM1,000,000


Above RM1,000,001


For example, the purchase of a property worth RM500,000 would put you in the first two tiers, hence, 1% of RM100,000 and 2% of RM400,000.

  • 1% of RM100,000 = RM1,000

  • 2% of RM400,000 = RM8,000

  • Total stamp duty fees: RM9,000

[PropertyTip]The stamp duty for a Sale and Purchase Agreement is often mistaken for the stamp duty for Instrument of Transfer. The stamp duty for the SPA is only RM10 per copy, while the stamp duty for MOT and DOA is calculated according to a fee structure of 1% to 4%.[/PropertyTip]

Stamp duty also applies for loan agreements, but it is capped at a maximum rate of 0.5% of the full value of the loan.

By purchasing an RM500,000 property with a 90% loan (since 10% of it will be the down payment), the loan amount would be RM450,000.

  • 0.5% x RM450,000 = RM2,250 total stamp duty fees

What Are Legal Fees?

Legal fees are part of the SPA and is basically a charge for engaging legal assistance for the purchase of a property. Typically, the solicitor will be assigned by the seller, but should the buyer choose to pick their own representative, it is allowed.

At times, developers may also choose to absorb the legal fees to reduce the buyer’s financial worries.

How To Calculate Legal Fees

The legal fees are calculated based on a percentage of the buying price of the property, which can be anywhere from 0.5% to 1%, depending on the value of the property.

Price of Property


First RM500,000


RM500,001 – RM1,000,000


RM1,000,001 – RM3,000,000


RM3,000,001 – RM5,000,000


Above RM5,000,001


For a property bought at RM600,000, the legal fees would be:

  • 1% x RM500,000 = RM5,000

  • 0.8% x RM100,000 = RM800

  • Total legal fees = RM5,800

Budget 2023 Stamp Duty Exemption For Your First Home

During the tabling of Budget 2023, the Malaysian government announced stamp duty exemptions for first-time homebuyers!

There will be a 75% exemption for houses worth more than RM500,000 and up to RM1 million until 31 December 2023.

While full stamp duty exemption will be given to both instruments of transfer and loan agreement for the purchase of a first home worth RM500,000 and below until 2025.

Yup, that means it’s full exemption for the stamp duty on both instrument of transfer and loan agreement if your property price is RM500,000 and below!

That’s a maximum of RM11,250 savings! The detailed calculation as follows:

Stamp duty for instrument of transfer + Stamp duty on loan agreement = Total stamp duty to be paid

  • [(First RM100,000 x 1%) + (Next RM400,000 x 2%)] + 0.5% of loan amount, assuming 90% of property price (RM450,000)
    = (RM1,000 + RM8,000) + (0.5% x RM450,000)
    = RM9,000 + RM2,250
    = RM11,250

[article thumbnail=”” title=”What Is Stamp Duty, And Its Exemptions In Malaysia?” category=”Read More”][/article]

Relevant Guides:

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