Cost of Buying a House in Malaysia 2026: Legal Fees and Stamp Duty
Property Lab editorial teamPublished 8 min read
Contents
What does it really cost to buy a house in Malaysia? On top of the 10% down payment, expect closing costs of about 5% of the price: legal fees for the sale and the loan, stamp duty, and smaller charges. First-time buyers of homes up to RM500,000 pay no stamp duty, which cuts closing costs to about 3%.
RM500,000 home with a 90% loan: about RM75,600 cash needed (RM50,000 down payment plus about RM25,600 in fees and stamp duty).
First-time buyer of the same home: about RM64,300, because stamp duty on the transfer and loan is waived.
What costs do you pay when buying a house in Malaysia?
Closing costs are the fees you pay to complete the purchase, on top of the price itself. Most are paid to your lawyer, who passes the stamp duty to LHDN (the Inland Revenue Board).
| Cost | Based on | Usually paid by |
|---|---|---|
| Down payment | 10% of price | Buyer |
| Legal fee, sale and purchase (SPA) | Price, on a fixed scale | Buyer |
| Legal fee, loan agreement | Loan amount, same scale | Buyer |
| Service tax on legal fees | 8% of the fees | Buyer |
| Stamp duty, transfer (MOT) | Price or market value, tiered | Buyer |
| Stamp duty, loan agreement | 0.5% of the loan | Buyer |
| Disbursements | Searches, registration, admin | Buyer |
| Valuation fee | Sliding scale on value | Buyer, if taking a loan |
| Agent commission | Up to 3% of price | Usually the seller |
The SPA is the sale and purchase agreement. The MOT (memorandum of transfer) is the document that moves the title into your name.
How much are legal fees for buying a house?
In Peninsular Malaysia, lawyers' fees for property deals follow the Solicitors' Remuneration Order 2023 (SRO 2023), in force since 15 July 2023. You pay twice: once for the SPA (based on the price) and once for the loan agreement (based on the loan amount).
- First RM500,0001.25% (minimum RM500)
- Next RM7,000,0001%
- Above RM7,500,000Negotiable, up to 1%
Then add 8% service tax. The rate for professional services, including legal work, went up from 6% to 8% on 1 March 2024. Some older guides and calculators still show 6%.
Two rules can lower the fee:
- Discount on subsale deals. For a subsale (buying from an owner, not a developer), lawyers may give a discount of up to 25% on the scale fee.
- Lower scale on developer deals. When you buy from a licensed developer, a reduced scale (Table B) applies: 70% of the normal fee for homes from RM250,001 to RM500,000, 65% up to RM1 million, and less above that. Many developers also offer "free legal fees" as a promotion.
Example: on a RM500,000 home, the SPA fee is RM6,250 before tax, or RM6,750 with 8% service tax. With a 25% subsale discount, it is about RM5,063. On a developer purchase under Table B, it is about RM4,725.
Disbursements (title and bankruptcy searches, registration, e-stamping, courier and admin) are charged on top of the fee. One law-fee guide puts them at roughly RM500–1,000 for a standard home purchase. Ask your lawyer for an itemised quote before you sign.
How much is stamp duty on property in 2026?
Stamp duty is a tax on legal documents. When you buy a home, it is charged on the transfer (MOT) and on the loan agreement.
| Part of the price (MOT) | Citizens and PRs | Foreigners (homes) |
|---|---|---|
| First RM100,000 | 1% | 8% |
| RM100,001 – RM500,000 | 2% | 8% |
| RM500,001 – RM1,000,000 | 3% | 8% |
| Above RM1,000,000 | 4% | 8% |
Charged on the price or the market value, whichever is higher. The 8% flat rate for non-citizens and foreign-owned companies buying residential property applies from 1 January 2026 under the Finance Act 2025; permanent residents pay the citizen rates. Loan agreement stamp duty is 0.5% of the loan for everyone.
Each band is taxed at its own rate. So a citizen buying at RM500,000 pays RM1,000 on the first RM100,000 plus RM8,000 on the next RM400,000: RM9,000. A foreigner buying a RM1.2 million home pays RM96,000, against RM32,000 for a citizen.
Timing matters. Documents signed in Malaysia must be stamped within 30 days. Late stamping costs RM50 or 10% of the duty (whichever is higher) within three months, and RM100 or 20% after that. From 1 January 2027, property transfers are due to move to LHDN's self-assessment system on MyTax. Your lawyer normally handles this.
Total buying costs at four price points
The table assumes a Malaysian citizen buying a subsale home with a 90% loan, paying the full scale legal fee with 8% service tax, and RM1,500 in disbursements for both sets of documents.
| Home price (RM) | 300,000 | 500,000 | 800,000 | 1,200,000 |
|---|---|---|---|---|
| Down payment (10%) | 30,000 | 50,000 | 80,000 | 120,000 |
| Legal fee, SPA (incl. 8% SST) | 4,050 | 6,750 | 9,990 | 14,310 |
| Legal fee, loan (incl. 8% SST) | 3,645 | 6,075 | 9,126 | 13,014 |
| Stamp duty, MOT | 5,000 | 9,000 | 18,000 | 32,000 |
| Stamp duty, loan (0.5%) | 1,350 | 2,250 | 3,600 | 5,400 |
| Disbursements (estimate) | 1,500 | 1,500 | 1,500 | 1,500 |
| Total cash needed | 45,545 | 75,575 | 122,216 | 186,224 |
| First-time buyer total | 39,195 | 64,325 | No exemption | No exemption |
Illustrative, in RM. Excludes the valuation fee, insurance and moving costs. Closing costs (everything except the down payment) come to about 5.1–5.5% of the price, or about 2.9–3.1% for an eligible first-time buyer.
Other costs buyers forget
- Valuation fee. The bank needs a valuation before it lends. Valuers charge on a decreasing scale, from 0.25% down to 0.04% of the value. Some banks absorb it during promotions, so ask.
- Insurance or takaful. MRTA or MRTT (mortgage reducing term cover) is usually optional but often offered with the loan. Fire insurance is normally required for landed homes; for condos, the building is usually covered by the management's policy.
- Apportioned bills. In a subsale, you refund the seller for quit rent, assessment and maintenance fees already paid for the period after you take over.
- Utility deposits and moving. New electricity and water accounts need deposits, plus movers.
- Renovation and furnishing. Often the biggest surprise. A new unit may need lights, built-in kitchen and grilles before you can live in it.
- Foreign buyers. State consent fees and levies, which differ by state and can be large, plus the higher 8% stamp duty.
How to lower your closing costs
- Check whether you qualify for the first-time buyer stamp duty exemption, and that the property's market value is within the limit.
- For a subsale, ask your lawyer for the discount allowed under SRO 2023 (up to 25% on the scale fee).
- For a new launch, ask the developer about free SPA and loan legal fees, or stamp duty rebates.
- Compare bank packages: some include free valuation or legal fees in exchange for a lock-in period.
- Get an itemised quote for disbursements so nothing is padded.
- Sign and stamp on time to avoid late penalties.
- Budget for renovation and furnishing separately from your closing costs.
FAQ
How much are closing costs when buying a house in Malaysia?
About 5% of the price on top of the 10% down payment, covering legal fees, service tax, stamp duty and disbursements. For an eligible first-time buyer of a home up to RM500,000, it is about 3%.
How much is the legal fee for a RM500,000 house?
Under SRO 2023 the SPA fee is RM6,250, or RM6,750 with 8% service tax. The loan agreement fee on a RM450,000 loan is RM5,625, or RM6,075 with tax. Disbursements are extra.
Do first-time buyers pay stamp duty in Malaysia?
Not on homes up to RM500,000 market value for SPAs signed until 31 December 2027. The exemption covers both the transfer and the loan agreement. Budget 2027 proposes extending it to 2030 with partial relief up to RM750,000.
Who pays the agent's commission?
Usually the seller. Commission is capped at 3% of the price. A buyer only pays if they hire their own agent under a separate agreement.
References
- Conventus Law: The Solicitors' Remuneration Order 2023Used for the SRO 2023 Table A and Table B scales and the effective date.
- PropCashflow: Lawyer fees for property transactions in MalaysiaUsed for the 25% discount rule, loan stamp duty and disbursement estimates.
- New Straits Times: SST 2 pct hike, here's what you need to knowUsed for the service tax rise to 8% from 1 March 2024 and the services that stayed at 6%.
- PropCashflow: Foreigner stamp duty 8% in MalaysiaUsed for the 8% flat rate for non-citizens on residential property from 1 January 2026.
- The Star: Budget 2027 proposes stamp duty exemptions for first-time homebuyersUsed for the proposed 2027–2030 exemption and the RM750,000 tier.
- EdgeProp: LHDN stamping guide 2026Used for the 30-day stamping deadline, late penalties and the 2027 self-assessment phase.
- DNH: Incidental costs of purchasing subsale property in MalaysiaUsed for the valuation fee scale, agent commission cap and the MOT stamp duty tiers.
Rules and rates change. Check the latest official wording with LHDN (stamp duty), the Malaysian Bar (SRO 2023) and the Royal Malaysian Customs Department (service tax) before you buy. Sabah and Sarawak have their own legal fee scales.
This article is general information only, not legal, tax or financial advice. All worked examples are illustrative and based on the assumptions stated. Ask your lawyer for an exact quote.
General information only, not legal, tax or investment advice. Rules and rates change; check the official source linked below before you act.
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