Subsale vs New Project in Malaysia: Which Is Better?
Property Lab editorial teamPublished 8 min read
Key points
- A Malaysian subsale is usually paid within about three months of the SPA, while a new project is paid in stages: 10% on signing, 65% during construction and 25% around vacant possession.
- Under the standard Housing Development Act contracts, developers must deliver vacant possession within 24 months for landed homes and 36 months for strata homes, with a 24-month defect liability period.
- KPKT reported 100 abandoned and 303 sick private housing projects in Peninsular Malaysia as at 30 June 2026, the main risk of buying a home that is not yet built.
Contents
- What is the difference between subsale and new project property?
- How do you pay for a new project property?
- How does buying a subsale property work?
- Is subsale or new project cheaper to buy?
- What are the risks of each?
- Which should you choose: subsale or new project?
- Checklist before you commit
- Frequently Asked Questions
- References
Subsale vs new project in Malaysia: a subsale home is ready to see and move into within months, but you pay most of the price at once and get no developer warranty; a new project lets you pay in stages as it is built and gives you a 24-month defect liability period, but you wait two to three years for the keys and carry the risk of delays. Neither is always better: it depends on when you need the home and how much risk you can take.
Choose subsale if you need to move in soon and want to see exactly what you buy. Choose a new project if you can wait, want staged payments and a warranty on defects, and the developer has a good delivery record.
Key numbers (as at October 2026)
- Vacant possession deadline, new landed home (Schedule G)24 months
- Vacant possession deadline, new strata home (Schedule H)36 months
- Defect liability period (new project)24 months
- Abandoned private housing projects, Peninsular (Jun 2026)100
- Subsale deposit by SPA signing10%
Also called: subsale or secondary market (buying from an existing owner), new launch or primary market (buying from a developer), SPA (sale and purchase agreement), Schedule G and Schedule H (the standard developer contracts for landed and strata homes), VP (vacant possession), DLP (defect liability period), LAD (late delivery compensation), earnest deposit (wang cengkeram).
What is the difference between subsale and new project property?
In Malaysia, a subsale property is bought from an existing owner and is usually complete, while a new project property is bought from a developer, often before it is built, under a standard Housing Development Act contract with staged payments, a delivery deadline and a defect warranty.
| Subsale | New project | |
|---|---|---|
| Seller | Current owner | Developer |
| Payment | About 3 months | Stages over the build |
| Before the SPA | 2%-3% earnest | 10% on signing |
| Keys | About 3-6 months | 24 or 36 months |
| Defect warranty | None | 24 months (DLP) |
| See it first | Yes | Show unit only |
| Legal fee scale | Up to 25% off | 65%-75% of scale* |
Subsale timings are common practice, not law, and depend on the SPA (Donovan & Ho; PropCashflow). New project terms are from Schedules G and H under the Housing Development Act. *Legal fee levels under the Solicitors' Remuneration Order 2023 for most price bands; sources differ on the top band.
How do you pay for a new project property?
For a new project in Malaysia, you pay 10% of the price on signing the SPA, then the developer bills the rest in stages as construction is certified, with the last 25% due around vacant possession, under the standard Schedule G and Schedule H payment schedules.
- During construction: 65% is billed across stages such as the foundation (10%), the structural frame (15%), walls (10%), roofing and wiring (10%) and finishes (10%), followed by sewerage, drains and roads, according to a billing guide that sets out the schedule.
- At the end: 17.5% at vacant possession, 2.5% when the title is delivered, and 5% held by the developer's lawyer as a stakeholder, released in two halves over the defect liability period.
- Loan interest: the bank releases your loan in the same stages and charges interest only on the amount drawn so far; full instalments usually start after the property is completed and handed over.
Bank Negara barred banks from financing the Developer Interest Bearing Scheme (DIBS), where the developer paid the interest during construction, from 2014 (at once for projects approved after 15 November 2013), and told banks to base loans on the net price after incentives.
How does buying a subsale property work?
For a subsale in Malaysia, you usually pay a 2% to 3% earnest deposit with the offer letter, top up to 10% when you sign the SPA, and pay the balance within about three months, mostly through your bank loan, according to a law firm's guide to subsale cash flow.
- Offer and earnest deposit: 2% to 3% of the price, often held by the agent or the seller's lawyer as stakeholder. Make the deal subject to loan approval if you can.
- SPA and 10%: pay the balance deposit to reach 10% and the legal fees and stamp duty, which are paid upfront.
- Completion: the bank usually releases the loan in one payment at completion, so full instalments start soon after. A completion period of three months with a one-month extension, with late interest often around 8% a year, is common in SPAs, but check your own contract.
- Keys: guides put the whole process at about 3 to 6 months from search to keys, longer for leasehold land that needs state consent.
Our guide to property buying costs in Malaysia lists the stamp duty and legal fees for both types.
Is subsale or new project cheaper to buy?
Upfront costs in Malaysia are often lower for a new project, because the Solicitors' Remuneration Order 2023 sets developer-purchase legal fees at 75%, 70% or 65% of the normal scale for most price bands, while subsale fees can be discounted by up to 25%; stamp duty uses the same scale for both.
- Legal fee scale: 1.25% on the first RM500,000 and 1% on the next RM7 million, plus 8% service tax, for the SPA and again for the loan agreement.
- Stamp duty: 1% to 4% of the price for citizens on the transfer, plus 0.5% on the loan agreement, whether subsale or new.
- Price: a new launch may come with rebates or other incentives; under Bank Negara's rules your loan is based on the net price after those incentives.
Compare the total cost, not just the headline price: a subsale in an older building may also need renovation money on top.
What are the risks of each?
The main risk of a new project in Malaysia is late delivery or abandonment, with 100 abandoned and 303 "sick" private housing projects in Peninsular Malaysia as at 30 June 2026, while the main risks of a subsale are the unit's condition, unpaid charges and title problems.
- New project, delay: if the developer misses the 24- or 36-month deadline, it owes LAD for each day of delay, and you can claim up to RM50,000 at the Tribunal for Homebuyer Claims within 12 months after the defect liability period ends.
- New project, abandonment: KPKT reported 100 abandoned projects covering 27,998 homes and 14,961 buyers as at 30 June 2026, according to a written reply to Parliament reported by Utusan Malaysia.
- Subsale, condition: no developer warranty, so inspect carefully and budget for repairs.
- Subsale, paperwork: check for maintenance and quit rent arrears and whether the unit has its own title. Our master title vs strata title guide explains buying a unit that is still on the master title.
Which should you choose: subsale or new project?
Choose a subsale in Malaysia if you need to move in within months, want to see the exact unit and neighbourhood, or want to rent it out quickly; choose a new project if you can wait, prefer staged payments and want a defect warranty, in our view.
| If you want... | Choose |
|---|---|
| To move in soon | Subsale |
| To see the actual unit | Subsale |
| Staged payments | New project |
| A defect warranty | New project |
| Lower legal fees | New project |
| Rent it out quickly | Subsale |
Our editorial summary of the facts above.
Checklist before you commit
- New project: check the developer's licence, its past delivery record and the project's construction progress.
- New project: read the SPA's delivery date and confirm it is the standard Schedule G or H contract.
- Subsale: get a title search, inspect the unit, and ask the management office about arrears.
- Both: get loan approval in principle before paying any deposit, and work out your monthly instalment and debt service ratio.
- Both: ask your lawyer for a written quote for legal fees, stamp duty and disbursements.
Frequently Asked Questions
Is it better to buy subsale or new property in Malaysia?
Neither is always better. Subsale suits buyers who need a home soon and want to see it first; new launches suit buyers who can wait two to three years and want staged payments plus a 24-month defect warranty.
How long does a subsale purchase take?
Usually about three to six months from offer to keys. The SPA normally gives three months to pay the balance, often with a one-month extension, and leasehold land can take longer because of state consent.
How much deposit do I need for a subsale?
Typically 2% to 3% as earnest money with the offer letter, then a top-up to 10% when the SPA is signed. Legal fees and stamp duty are also paid at that stage.
Do I pay loan interest while a new project is being built?
Yes, but only on the part of the loan already released to the developer. This progressive interest grows as construction stages are billed, and full instalments start after completion and handover.
What happens if a new project is delivered late?
The developer must pay liquidated damages for each day past the contract deadline (24 months for landed, 36 months for strata under the standard contracts). You can also file a claim of up to RM50,000 at the Tribunal for Homebuyer Claims.
Are legal fees cheaper for a new project?
Usually. The Solicitors' Remuneration Order 2023 puts developer-purchase fees at 75%, 70% or 65% of the standard scale for most price bands, while subsale fees may be discounted by up to 25%.
References
- PKNS legal note: Time for delivery of vacant possession, Sri Damansara v Voon Kuan Chien (PDF)Used for the 24- and 36-month vacant possession deadlines, LAD and the Sri Damansara case on when the period starts.
- mhub: Progress billing mechanics handbook (August 2026)Used for the stage-by-stage payment percentages and the 5% stakeholder sum.
- Property Genie: Progressive payment interest before receiving the keysUsed for how progressive interest works.
- The Borneo Post: Lending curb more stringent than expected (November 2013)Used for Bank Negara's DIBS prohibition and loans based on the net selling price.
- Donovan & Ho: Cash flow and timing of a subsale purchase (July 2020)Used for the earnest deposit, the 10% at SPA, the three-month completion period and upfront costs.
- PropCashflow: Subsale property process (February 2026)Used for the stakeholder role and the 3-6 month timeline.
- EdgeProp: Defect liability period and developer accountability (October 2026)Used for the 24-month DLP and the Tribunal for Homebuyer Claims limit.
- Utusan Malaysia: 303 sick private housing projects as at June (July 2026)Used for KPKT's figures on sick and abandoned projects.
- Conventus Law: The Solicitors' Remuneration Order 2023Used for the legal fee scale and the developer-purchase discounts.
- PropCashflow: Lawyer fees for property transactions in MalaysiaUsed for the subsale fee discount of up to 25% and the stamp duty scale.
Check the KPKT website for the latest list of late, sick and abandoned projects, and your own SPA for the exact terms.
This article is general information only, not legal or financial advice.
Sources
- Progress billing mechanics handbook — mhub
- Time for delivery of vacant possession: Sri Damansara v Voon Kuan Chien — PKNS e-Perundangan
- Defect liability period and developer accountability — EdgeProp
- 303 projek perumahan swasta sakit bernilai RM40.25 bilion direkod setakat Jun — Utusan Malaysia
- Cash flow and timing of a sub-sale property purchase in Malaysia — Donovan & Ho
- The Solicitors' Remuneration Order 2023 — Conventus Law
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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