Foreign Investment Committee Approval

To attract greater foreign investors to Malaysia, Malaysian Government on 30 December 2006 abolished the need for FIC approval.

However, With effect from January 2010, FIC approval is required for housing properties below RM 500,000.

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Legal Fees Payable in Buying a Property

The legal fees payable to a lawyer acting for you when you buy a property is calculated based on the purchase price as follows:

- For the first RM150,000, the legal fees payable is 1%

- For the next RM850,000, the legal fees payable is 0.7%

- For the next RM2,000,000, the legal fees payable is 0.6%

- For the next RM2,000,000, the legal fees payable is 0.5%

- For the next RM2,500,000, the legal fees payable is 0.4%

- For the remaining, if any, negotiable

For instance, if the purchase price is RM400,000. The calculation is as follows:

Total legal fees payable:

(RM150,000 X 1%) + (RM250,000 X 0.7%) = RM 3,250.00

No discount rule

According to solicitors’ Remuneration Order, lawyers are strictly not allowed to give discount in conveyancing matters.

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Real Properties Gains Tax

With effect from 1st April 2007, all persons are exempted from the provisions of the Real Properties
Gains Tax Act 1967.

However under proposed budget 2010, the RPGT of 5% would be imposed from Jan 1 on gains
(minus 10% or MYR 10,000 whichever is higher from the gain) from the disposal of real property
irrespective of the holding period and category of owner.

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STAMP DUTY PAYABLE

A purchaser of a property has to pay stamp duty to the Malaysian Government when he buys a property.

How to calculate the stamp duty payable?

The stamp duty chargeable on the sale and purchase Agreement is RM10 each

The stamp duty chargeable on the Memorandum of Transfer is calculated based on the purchase price as follows:

- For the first RM100,000, the stamp duty payable is 1%
- For the next RM400,000, the stamp duty payable is 2%
- For any sum exceeding RM500,000, the stamp duty payable is 3%.

For instance, if your purchase price is RM800,000. The calculation is as follows:

Total stamp duty payable:

(RM100,000 X 1%) + (RM 400,000 + 2%) + (300,000 X 3%) = RM18,000.

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Stamp Duty Payable when Renting a Property

Stamp Duty Computation (for a 2 years tenancy)

For example, if the monthly rental is RM8,000,

Stamp duty payable is as follows: