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

Wanting to buy your first property is always an exciting, and slightly nerve-racking, experience! Here are some reasons why:
- Youâve done your research to find the perfect area surrounded by plenty of amenities (and the neighbours arenât weird in any way).
- Youâve prepared a solid budget that maps out your repayments, savings, and miscellaneous expenses.
- Youâve also selected the right bank that will provide you with a 90% margin of finance with an attractive interest rate.
âNow, what could possibly go wrong,â 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 âhidden feesâ you overlooked. Yep, apart from the propertyâs down payment, thereâs also the following:
- Legal fees for the Sale and Purchase Agreement (SPA) and loan agreement
- Stamp duty Malaysia fees
Suddenly, that carefully planned budget of yours is in chaos as you realise that you donât have enough money to purchase your dream home after all.
How Am I Supposed To Know What The Rates Are?
Well, if you wanna make sure the scenario above doesnât apply to you, youâd better check out the list of rates weâve compiled below for your reference.
Theyâll show you what to expect when it comes to the additional payments you need to make. Hopefully, you wonât be caught off-guard and have to scramble to raise enough funds on time. Youâre welcome!
If the list above doesnât scare you off, then good for you, youâre ready for what is probably the biggest financial step youâll ever make!
What Is A Sale and Purchase Agreement?
AÂ Sale & Purchase Agreement (SPA)Â 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.
Discover properties for sale
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!
Itâs 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.

Â
Â
How To Calculate Stamp Duty Fees
Price of Property |
Percentage |
First RM100,000 |
1% |
RM100,001 â RM500,000 |
2% |
RM500,001 â RM1,000,000 |
3% |
Above RM1,000,001 |
4% |
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
ProTip
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%.
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 buyerâs 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 |
Percentage |
First RM500,000 |
1% |
RM500,001 â RM1,000,000 |
0.8% |
RM1,000,001 â RM3,000,000 |
0.7% |
RM3,000,001 â RM5,000,000 |
0.6% |
Above RM5,000,001 |
0.5% |
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 itâs full exemption for the stamp duty on both instrument of transfer and loan agreement if your property price is RM500,000 and below!
Thatâs 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