Selling a Property

A general overview of the process when selling a house or apartment in Malaysia...

It is advisable to hire an estate agent to help price and market the property, as well as a local lawyer to handle the legal paperwork (conveyancing).

Once the seller and potential buyer reach an agreement, both the buyer and seller sign a Letter of Offer and the buyer pays a deposit of two percent of the agreed price. This is known as the booking fee and is non-refundable.

The Sales and Purchase Agreement (S&P Agreement) is then drafted and should be signed within 14 days; at this point a further eight percent of the purchase price is paid as a deposit.

If the sale is subject to Real Property Gain Tax (RPGT), the two percent deposit from the purchase price should be submitted to the Inland Revenue Board as a deposit for the RPGT payment. This is done before the sale is finalised, because the tax must be paid within 60 days of the sale, but the paperwork is rarely completed before 90 days. If, after allowing for capital improvements, the gain is less than first calculated and too much tax was paid, the excess amount is refunded.

A foreigner who sells a property valued at more than RM 20 million must also get approval for the sale from the Foreign Investment Committee.

The sale should be completed (and the full purchase price paid) within three months. An extra month can be allowed if financing takes longer than expected to arrange. However, interest at the rate of ten percent per annum (calculated daily), can be charged for the duration of the delay.

Fees involved in selling a property

  • Estate agent's commission (if an agent is used): typically two to three percent of the selling price. In addition, the government charges six percent tax on this commission
  • Real Property Gain Tax (RPGT): a 30 percent tax is levied on the gains if the property is sold within five years of purchase
  • Conveyancing fee: for handling legal paperwork
  • Legal fees from the buyer's lawyer for preparing documents for the RPGT and any other related fees

Further Information