Frequently Asked Questions

Property FAQs

Strata Title refers to a form of property ownership that divides a building into individual units, each with its own distinct title. This means that each unit owner is responsible for maintaining their own unit as well as their share of the common areas. While Strata Title properties generally come with a higher price tag compared to freehold properties, they offer enhanced security and peace of mind.

A condo is a type of property with Strata Title ownership, typically situated in a high-rise building. Condo owners are accountable for maintaining their units. Service apartments, also Strata Title properties, are commonly found in low-rise buildings. Owners of service apartments are responsible for their unit’s maintenance, along with potential monthly service charges for shared amenities like pools, gyms, and parking. On the other hand, apartments are leasehold properties usually located in high-rise buildings. Apartment owners don’t possess the land but hold a lease for a fixed duration.

There are several ways to assess the market value of a property in Malaysia. One approach is to utilize online property valuation websites. These platforms typically require basic property details such as location, size, and number of rooms to provide an estimated market value. Another option is to consult a property agent who has access to current market data, enabling them to offer a more accurate valuation of your property.

Another method to determine the property value is by engaging banks to assist in checking the valuation. When you apply for a loan or mortgage from a bank to purchase a property, the bank will typically conduct a valuation of the property as part of their due diligence process.

To ascertain the property owner, you can search for the property’s title number on the National Land Department (NLD) website. The NLD website will display the owner’s name as well as additional information about the property, including its address, size, and zoning.

The standard commission rate for property agents in Malaysia is typically 2% of the property’s selling price. However, the actual rate may vary depending on the agent and the specific property. It’s important to negotiate and agree upon the commission rate with the agent before entering into any contractual agreements.

Legally, buyers are not obligated to pay the property agent’s commission. However, it is customary to do so. Normally, the seller covers the commission, but they may request the buyer to contribute a portion of it. It is crucial to discuss and clarify the commission arrangement with the agent prior to finalizing any contracts.

Mortgage interest rates in Malaysia are determined by various factors, including the bank and the type of loan. Currently, the average mortgage interest rate in Malaysia hovers around 4%. It’s important to note that these rates may vary among different financial institutions.

The legal fees for buying property in Malaysia are influenced by the property’s value and the lawyer’s charges. Typically, the legal fees range from 1% to 3% of the property’s value. These fees cover the legal processes and documentation required for property transactions.

The stamp duty fees for buying property in Malaysia are determined based on the property’s value and its type. Generally, the stamp duty fees range from 1% to 3% of the property’s value. These fees are paid to the government upon property transfer and are an essential part of the buying process.

Property owners in Malaysia are obligated to pay several taxes, including property tax, assessment tax, and quit rent. The property tax is an annual tax based on the property’s value. Assessment tax is an annual tax calculated according to the property’s size. Quit rent is an annual tax paid to the government to maintain ownership rights over the property.

Before buying a house in Malaysia, there are several important factors to consider. Here are some key points to know:

  1. Budget and Financing: Determine your budget and financial capabilities. Assess your affordability, including down payment, loan eligibility, and monthly mortgage repayments. Consider consulting with banks or financial institutions to understand the loan options available to you.
  2. Property Type and Location: Identify your preferred property type (e.g., landed house, condominium, apartment) and consider the location based on your needs, such as proximity to amenities, workplace, schools, and transportation.
  3. Property Market Research: Conduct thorough research on the property market. Study recent property prices and trends in the desired location to make an informed decision. Engage with property agents, attend property exhibitions, and utilize online platforms to gather information.
  4. Legal Considerations: Understand the legal aspects of property purchase in Malaysia. Engage a qualified lawyer who specializes in property transactions to guide you through the legal process, review contracts, and ensure a smooth transaction.
  5. Property Inspection: Inspect the property thoroughly to assess its condition, quality, and any potential issues. Engage professional home inspectors if necessary to identify structural, electrical, or plumbing problems.
  6. Facilities and Amenities: Consider the facilities and amenities available within the property or the surrounding area. Check for features such as parking, security, recreational areas, and access to public transportation.
  7. Future Development Plans: Investigate any upcoming development projects or infrastructure plans in the vicinity. This information can impact property values and quality of life in the long run.
  8. Homeownership Costs: Be aware of additional costs besides the property price, such as stamp duty, legal fees, valuation fees, and maintenance charges. Factor these costs into your budget planning.
  9. Title and Ownership: Understand the type of property title (freehold or leasehold) and its implications. Verify the property’s ownership status and check for any encumbrances or restrictions.
  10. Engaging Professionals: Seek professional advice from real estate agents, lawyers, or property consultants who possess local market knowledge and experience. They can assist you in navigating the property buying process and provide valuable insights.

The most popular type of house in Malaysia is the landed property. Landed properties are standalone houses that come with their own land, providing homeowners with more space and privacy. They can range from single-storey terrace houses to multi-storey bungalows. Landed properties are highly sought after due to their sense of ownership and the opportunity to have a garden or outdoor space. However, it’s important to note that preferences may vary depending on factors such as location, budget, and individual preferences.

Several factors can influence house prices in Malaysia. Here are some key factors that can impact the property market:

  1. Location: The location of a property is a significant factor in determining its price. Properties situated in prime locations, such as city centers, established neighborhoods, or areas with good connectivity and amenities, tend to have higher prices compared to properties in less desirable or remote locations.
  2. Supply and Demand: The balance between supply and demand plays a crucial role in property prices. When there is high demand for housing but limited supply, prices tend to rise. Conversely, when there is an oversupply of properties and low demand, prices may decrease.
  3. Economic Conditions: The overall economic conditions, including GDP growth, employment rates, and income levels, can influence property prices. During periods of economic growth and stability, property prices generally tend to rise.
  4. Interest Rates: Interest rates set by the central bank can impact mortgage affordability. Lower interest rates make borrowing more affordable, which can stimulate demand and drive up property prices. Conversely, higher interest rates may dampen demand and lead to lower property prices.
  5. Government Policies: Government policies and regulations, such as housing incentives, subsidies, taxes, and loan restrictions, can directly impact property prices. Changes in government policies can affect affordability and demand in the housing market.
  6. Infrastructure and Development: The presence of quality infrastructure, such as transportation networks, educational institutions, healthcare facilities, and commercial centers, can enhance the desirability and value of properties in an area.
  7. Market Sentiment: Sentiments and expectations of buyers and investors can influence property prices. Factors like consumer confidence, investor sentiment, and market speculation can contribute to fluctuations in property prices.

The type of property that is considered the most favorable for investment in Malaysia depends on various factors such as location, market conditions, and personal investment goals. However, condominiums and apartments are often preferred by investors due to their potential for rental income and capital appreciation. These types of properties are in high demand, particularly in urban areas and areas with strong economic growth. It is important to conduct thorough research, assess market trends, and seek professional advice to make an informed decision based on individual investment objectives and risk tolerance.

The minimum income needed to buy a house in Malaysia depends on various factors, such as the property value, loan amount, and individual financial circumstances. However, a general guideline is to have a gross monthly income that is at least three times the monthly mortgage repayment. For instance, if you plan to purchase a property valued at RM500,000 and obtain a loan of RM400,000, your gross monthly income should be around RM4,000.

Please keep in mind that this is a rough estimate and other factors like credit score, debt-to-income ratio, and property type can influence income requirements. It is recommended to consult with a bank or financial advisor to obtain a more accurate assessment based on your specific situation.

There are a few things you need to pay when buying a house in Malaysia. These include:

  1. Down payment: The down payment is the amount of money you pay upfront when you buy a house. The minimum down payment requirement for a house in Malaysia is 10% of the property’s value. However, you may be able to pay a lower down payment if you have a good credit score.
  2. Stamp duty: Stamp duty is a tax that you pay when you buy a house. The amount of stamp duty you pay depends on the value of the property. For example, if you buy a property worth RM500,000, you will pay RM10,000 in stamp duty.
  3. Legal fees: Legal fees are the fees you pay to a lawyer to help you with the buying process. The legal fees typically range from 1% to 3% of the property’s value.
  4. Property valuation: A property valuation is an estimate of the value of the property. You will need to get a property valuation before you can get a home loan. The property valuation fee typically ranges from RM500 to RM1,000.
  5. Loan application fee: When you apply for a home loan, you will need to pay a loan application fee. The loan application fee typically ranges from RM100 to RM500.
  6. Bank processing fee: Once your home loan application is approved, you will need to pay a bank processing fee. The bank processing fee typically ranges from RM50 to RM200.

In addition to these costs, you may also need to pay for other miscellaneous expenses, such as:

  1. Moving expenses: If you are moving into a new house, you will need to pay for moving expenses, such as hiring a moving company and packing supplies.
  2. Home improvement costs: If you are buying a new house, you may need to pay for home improvement costs, such as painting, flooring, and landscaping.
  3. Property insurance: You will need to purchase property insurance to protect your home from damage. The cost of property insurance varies depending on the value of your home and the type of coverage you choose.

It is important to factor in all of these costs when you are budgeting for buying a house in Malaysia.

In Malaysia, there is no specific maximum age limit for buying a house. The loan tenure for purchasing a property can extend up to the borrower’s age of 70. However, it’s important to note that lending policies and maximum loan tenures may vary among different banks and financial institutions. While there are no age restrictions, lenders typically consider the borrower’s age and retirement age when determining the loan tenure. The aim is to ensure that the loan can be fully repaid before the borrower reaches the age of 70. It is advisable to consult with banks or financial advisors to understand the specific loan tenure options available based on your age and individual circumstances.

The amount of stamp duty you pay when buying a property in Malaysia depends on the value of the property. The current rates are as follows:
  • 1% for the first RM100,000
  • 2% for the next RM400,000
  • 3% for the next RM500,000
  • 4% for anything above RM1 million
For example, if you buy a property worth RM500,000, you will pay RM10,000 in stamp duty (1% of the first RM100,000 + 2% of the next RM400,000).

Yes, it is possible to buy a house with cash in Malaysia, and there are no specific restrictions on purchasing property using cash. However, it’s worth noting that in Malaysia, it is considered unusual for individuals to buy properties outright with cash, and it may raise alarms or suspicion from authorities such as LHDN (Inland Revenue Board of Malaysia). To avoid any potential concerns, some property buyers choose to take up a housing loan, even if they have the funds to purchase the property in cash. This helps to demonstrate the legitimate source of funds for the property acquisition.

Taking a housing loan also offers certain advantages, such as the potential to claim tax deductions on the loan’s interest, building a credit score by making regular loan repayments, maintaining liquidity by preserving cash for other investments or expenses, and protecting your assets by using the property as collateral. It’s important to note that regardless of whether you choose to buy a house with cash or opt for a housing loan, as long as your funds come from legal and ethical sources, you will not encounter any problems.

Ultimately, the decision to buy a house with cash or take out a housing loan depends on your individual circumstances, financial goals, and risk tolerance. It is recommended to carefully consider these factors and consult with financial advisors or professionals to make an informed decision that aligns with your specific needs.

Profit is calculated by subtracting the purchase price of a house from the selling price. For example, if you purchase a house for RM500,000 and sell it for RM600,000, your profit would be RM100,000. However, there are some costs that you need to take into account when calculating your profit, such as:
  1. Stamp duty: You will need to pay stamp duty when you sell your property. The amount of stamp duty you pay depends on the value of the property.
  2. Legal fees: You will need to pay legal fees when you sell your property. The amount of legal fees you pay will depend on the lawyer you use.
  3. Agent’s commission: If you use a property agent to sell your property, you will need to pay them a commission. The amount of commission you pay will depend on the agent and the property. Once you have taken all of these costs into account, you can calculate your profit. For example, if you sell your house for RM600,000, but you have to pay RM10,000 in stamp duty, RM5,000 in legal fees, and RM10,000 in agent’s commission, your profit would be RM535,000.
In Malaysia, you may also need to pay Real Property Gains Tax (RPGT) if you sell your property for a profit. The amount of RPGT you pay will depend on the amount of profit you make, the type of property you sell, and how long you have owned the property. You can calculate your RPGT by using the RPGT calculator on the Inland Revenue Board of Malaysia (LHDN) website. Here is an example of how to calculate RPGT:
Selling price: RM600,000
Purchase price: RM500,000
Profit: RM100,000
Holding period: 5 years
Malaysian citizen: If you are a Malaysian citizen, you will pay RPGT at the following rates:
  • 0% if you have held the property for less than 3 years
  • 5% if you have held the property for 3 to 5 years
  • 10% if you have held the property for more than 5 years
Non-Malaysian citizen: If you are a non-Malaysian citizen, you will pay RPGT at the following rates:
  • 30% if you have held the property for less than 3 years
  • 35% if you have held the property for 3 to 5 years
  • 40% if you have held the property for more than 5 years
In this example, the RPGT would be RM5,000 (10% of RM50,000).
You can find more information about RPGT on the LHDN website.

If you still owe the bank in Malaysia for your mortgage, you can proceed with selling your house through a process known as a “repossession sale.” In this scenario, the bank will sell your house to recover the outstanding loan amount.

Here are the steps involved in a repossession sale:

  1. You will receive a notice of default from the bank, informing you that you have defaulted on your loan and that the bank may initiate repossession proceedings.
  2. If you fail to settle the outstanding balance on your loan, the bank will file a foreclosure suit against you, seeking a court order to sell your house.
  3. The court will conduct a hearing to determine whether to grant the bank’s foreclosure request. If approved, the bank will proceed to sell your house at a public auction.
  4. The buyer at the auction will pay the bank the outstanding loan balance, along with any additional fees and expenses. The proceeds from the sale will be used by the bank to repay your loan.
  5. You will be responsible for any remaining balance that remains after the auction.
  6. If you find yourself in a situation where you need to sell your house due to loan default, it is advisable to consult with a lawyer. A legal professional can guide you through the process, explain your options, and safeguard your interests.
  7. Additionally, here are some key considerations if you are selling a mortgaged property:
  8. Obtain the approval of your lender before proceeding with the sale.
  9. Settle the outstanding loan balance before selling the house.
  10. Be aware of any prepayment penalties that may apply if you sell the property before the loan term is completed.
  11. If you sell the house for a profit, be prepared to pay capital gains tax.

It is crucial to factor in all of these aspects when contemplating the sale of a mortgaged property.

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