3 Major Costs for Foreigners Buying Property in Malaysia in 2025
When foreigners purchase property in Malaysia, it’s essential to factor in several key settlement costs during the budgeting process. These costs are often overlooked but can significantly impact your overall investment. Below are the three main expenses every foreign property buyer should be aware of:
1. Stamp Duty
Stamp duty is a government-imposed tax on legal documents related to property transactions. It applies to the following:
- Sale and Purchase Agreement (SPA) – RM10 (nominal stamp duty)
- Memorandum of Transfer (MOT) – 4% of the property’s value
- Loan Agreement – 0.5% of the loan amount
These duties are mandatory and must be paid upon the execution of each document.
2. Legal Fees (for SPA & Loan Agreement)
Hiring a lawyer is necessary to handle the legal aspects of buying property, including preparing all required documents for the transfer process. Legal fees are calculated based on the purchase price of the property as follows:
- First RM500,000 – 1.25%
- Next RM500,000 – 1.00%
- Next RM2,000,000 – 1.00%
- Next RM250,000,000 – 1.00%
- Any amount above RM250,000,000 – Negotiable, but capped at 1.00%
These rates apply to both the Sale and Purchase Agreement and the Loan Agreement.
3. Levy for Foreign Ownership Approval
Foreigners must comply with the regulations set by the respective state governments. This includes applying for approval to purchase property and paying the corresponding levy, unless an exemption is granted by the National Land Council. The specific rates and conditions vary by state.
Final Tip:
If you’re a foreigner planning to invest in Malaysian real estate, be sure to consult with a qualified property lawyer and factor in these three key expenses. This will ensure a smooth and compliant purchase process.
Need help navigating your property investment in Malaysia? Contact Ivy Lim today for a personalized consultation.
