The house prices in Malaysia are measured by the price of each square foot (sq ft) or square meter (sqm). The House Price Index has also been used for measurement of house price movements over the years.

Generally the prices of the Malaysian properties are relatively low as compared to many other countries. According to the research by Global Property Guide, an average per square metre (sq. m) price in USD of a 120 sq. m (1300 sq ft) subdivided building located in the centre of the most important city of each country (either the Administrative capital; and/or Financial Capital) is as follows:-

The indicative prices for Malaysian properties varied as follows:-

Landed Property

Terraced House

It’s a row of identical or mirror-image houses sharing side walls. The first and last of these houses are called an end terrace, or end house or corner house, usually larger than those houses in the middle. Terraced houses normally have open spaces at the front and back. Each row may consist of 10 to 12 units depending on the width of the house.

Semi detached House

Semi-detached house or “Semi-D” consist pair of houses built side by side as units sharing a party wall. Each house’s layout is normally a mirror image of the other one. Semi-D houses have front, rear and any one side open space.

Bungalow

A bungalow is a type of stand alone building. It is also known as detached house. This detached houses have open spaces on all sides.

Building Your Own House

Bungalow Lot

You may choose to design and build your own house if you purchase a bungalow lot from a bungalow development scheme. There are various lot sizes available. Some of these bungalow developments are within a golf course with club house facilities for residents to enjoy.

Orchard House

The Orchard house normally comes with a land plot size of not less than acre. Orchard house (or homestead) is an exciting lifestyle development offering you fruit orchard with a village style house.

Subdivided Building

Condominium

A condominium, or most commonly called “Condo”, is a unit of house in multi-unit dwelling building where each unit is individually owned and the common areas such as walkways, recreational facilities are jointly owned by the unit owners. The owners and occupiers of condominiums are subject to rules and regulations of the condominiums.

Studio unit - consists mainly of a large room which is the living, dining, and bedroom combined. There are kitchen facilities as part of the central room. but the bathroom has its own smaller separate room.

Penthouse - is a special unit that is located at the top of building and separate from others in the building by unique features such as outdoor terraces, private entrances or elevators and higher ceilings.

Duplex - is a single dwelling unit spread over two floors connected by an indoor staircase in a condominium.

Penthouse and Duplex are generally expensive and associated with a luxury lifestyle.

Primary Market

All purchases of residential property direct from housing developers must use the Schedule G (agreement for landed property under construction) or the Schedule H (agreement for subdivided building under construction), Schedule I (agreement for landed property under the Build the Sell scheme) or Schedule J (agreement for subdivided building units under the Build then Sell scheme) respectively of the Housing Development (control and Licensing) Act 1966 (HDA) as the Sale and Purchase Agreement (SPA).

Payment of the purchase price under the Schedules G and H is by payment of 10% upon signing of SPA and the balance 90% to be paid progressively based on completion of work as certified by Architects. Payment of the last 5% of the purchase price will be held by a firm of lawyers as stakeholders for the defect liability period, which is currently 24 months from the delivery of vacant possession.

Payment of the purchase price under the Schedules I and J is by payment of 10% upon signing of Sale and Purchase Agreements and the balance 90% to be paid upon completion. The 24 months defect period remains.

Secondary Market

There are no fixed rules on the form of agreement for purchases from existing house owners (more commonly called sub-sale). However, it is common practice that upon signing of the Sale and Purchase Agreements, 10% of the purchase price be paid to the seller and the purchaser be given 3 months to pay the balance purchase price with an extension of 1 month if he fails to do so within the first 3 months’ period. Interest at the rate of approximately 10% per annum calculated on a daily basis is normally charged for the extended period. Payment of the balance of purchase price is usually made to the lawyers acting for the seller as stakeholders to ensure redemption of the house (if the same is still charged or signed to a bank or financial institution at the time of sale)

Notes: Purchasers are advised to consult qualified lawyers for advice.

Land Title

There are two categories of titles:-

1. Freehold - which gives the owner perpetual ownership capable of succession
2. Leasehold - which allows the owner to stay in possession only for a specified period. When the specified period ends, ownership reverts back to the authority which issued the title; however extension is possible upon application and payment of land premium.

Generally, a house is issued a title for the piece of land on which the house erected; and condominium is issued a strata title for the specified unit on the specific floor of the building in which the condominium is located.

Financing

If you are taking out a loan to finance your acquisition, there are many available:-

• Licensed Financial Institutions
• Insurance Companies

Stamp Duty

Stamp duty is levied on the document of transfer (i.e. the memorandum of transfer if the title has been issued, or the deed of assignment if the title has not been issued) based on the purchase price or the adjudicated value by the valuation department, whichever is higher, as follows:-

1. 1% on the first RM100,000.00
2. 2% on the next RM400,000.00
3. 3% on the remainder

Stamp duty is also levied on the Principal Instrument for the loan that finances the purchase at the rate of RM5.00 for every RM1,000.00 of the loan or any part thereof.

Legal Fees on Sale And Purchase Agreement

The First Schedule of Solicitors’ Remuneration Order 2005 (effective on 1 January 2006) sets out the fees to collected by lawyers for work done in handling the sale and purchase based on the purchase price as follows:-

For any purchase under Housing Development Act (HDA), the applicable rates are as follows:

Legal Fees On Loan Documentation

In relation to loan documentation, the legal fees as per Solicitors’ Remuneration Order 2005 (effective 1 January 2009)

For the financing of any purchase under Housing Development Act (HDA), the applicable rates are as follows:

Real Property Gain Tax (RPGT)

RPGT is a tax on chargeable property gain. Through His Majesty’s Government Gazette of 1 April 2007 and the Minister’s making of the Real Property Gain Tax (Exemption) (No 2) Order 2007, all persons shall be exempted from all provision of the Act in respect of any disposal of chargeable assets after 31 March 2007.

Documentation And Procedures

There are no fixed rules on the form of agreement for tenancy. However, it is common practice that upon signing of tenancy, two (2) months’ rental is paid as deposit, one (1) month rental is paid in advance and a utility deposit that is normally fixed at one (1) month rental subject to the parties’ agreement. A lease (tenancy more than three[3] years) can be registered with relevant land authority by submitting a duly completed Form 15A prescribed under the National Land Code of Malaysia.

Stamping Fee

All tenancy/lease agreements are required to be stamped as failure to do so would render the agreement inadmissible in court in the event a dispute arises.

The stamping fee calculation is based on the amount of monthly rental payable and also the tenancy period. The formula below set out in the Stamp Act 1949 is used to calculate the required stamping fee on the original document.

eg:
Monthly Rental: RM3000.00
Annual Rental: RM3000.00 x 12 months = RM 36,000.00
1 Year Stamp Duty: (RM36,000.00 - RM2,400 / RM250 ) x 1 year = RM 134.40

Legal Fees

The legal fees for drawing up tenancy / lease agreement would depend on the amount rent payable monthly. The Solicitors’ Remuneration Order 2005 has set out the formula below to calculate the legal fees:

Tenancy (below 3 years)

Lease

When you owning a property in Malaysia, this following service & utility charges or fee are payable to the relevant parties:-

Maintenance Service Charge

For subdivided building (eg. condo), from the date of the delivery of the vacant possession of the parcel, the buyer shall be responsible for paying the monthly maintenance and service charge to the management company appointed by developers

Sinking Fund

For subdivided building (eg. condo), the buyer should upon the date of vacant possession contribute to a sinking fund an amount equivalent to 10% of the maintenance service charge. Sinking Fund shall act as reserve for items that do not require services annually.

Quit Rent

Regardless of landed or subdivided building, quit rent is paid to the relevant Land Office annually, on or before 31st May.

Assessment Charges

For all types of properties payment to be made to the relevant local authority bi-annually; the first-half-yearly to be paid on or before 28th February; and the second-half-yearly to be paid on or before 31st August. The value is determined by Government Valuers based on estimated annual rental income.

Sewerage Service Charge

Each household is required to pay the sewerage service charge to Indah Water Consortium (IWK)

Electricity Bill

To be paid to Tenaga Nasional Berhad based on monthly usage

Water Bill

To be paid to the water services authorities based on monthly usage

Gas Bill

If there is a centralised gas supply system (for subdivided building), the gas bill shall be paid to the gas suppliers on monthly usage.

Telephone Service Charge

To be paid to TM Berhad as per monthly usage for land line. For mobile phone, it is to be paid to the respective service providers, i.e. Celcom (019 & 013), Maxis (012 & 017) and DiGi (016,014 & 018)

Internet Connection Fee

To be paid to the internet service providers (TM Berhad, Time Telekom, private service providers, etc) per monthly usage or the package subscribed