As you take your first steps toward homeownership, it’s essential to be prepared for the journey ahead.

While you’ve probably heard about the 10% down payment, typically around 10% of the property price, although this can vary depending on the financing arrangement.

There’s actually a whole lot more to consider.

Buying a home comes with several upfront and ongoing expenses beyond the purchase price. In Malaysia, these additional costs can often amount to around 7%–12% of the property price, depending on the property, financing arrangement, and applicable fees.

Let’s discover some fees you may not have thought about when buying a home!

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Upfront and Legal Costs

• Down payment: Typically around 10% of the property price, although this can vary depending on the financing arrangement.
• Stamp duty: Government taxes charged on the transfer of property ownership and on loan documents.
• Legal and disbursement fees: Payments to lawyers for preparing and processing the Sale and Purchase Agreement (SPA), loan documents, and related paperwork.
• Property valuation fee: A fee for assessing the property’s market value, particularly when required by the lender for financing purposes.

1. Stamp duty fees

You can never run away from stamp duty fees.

This is the tax placed on your property documents during the sale or transfer of the property which must be stamped within 30 days from the date of transaction.

What are some examples?

• Stamp duty on the Sale and Purchase Agreements (SPA) of your property
• Stamp duty on Deed of Assignment (DOA) / Memorandum of Transfer (MOT) paid by new property owner
• Stamp duty on your loan agreement (0.5% of the total loan)

Latest stamp duty fees on the MOT or DOA

Price Tier	Stamp Duty Malaysia (% of property price)
First RM100,000	1%
RM101,000 – RM500,000	2%
RM500,001 – RM 1 million	3%
> RM 1 million	4%

Payment of stamp duty can be now done online on the LHDN official website through the Stamp Assessment And Payment System or STAMPS.

But good news…

But good news…

First-time homebuyers who purchase a residential property priced at RM500,000 or below can still enjoy 100% stamp duty exemption on the instrument of transfer and loan agreement. Under Budget 2026, this exemption has been extended for another two years, from 1 January 2026 to 31 December 2027.

For properties priced RM500,001 to RM1 million, the previous 75% stamp duty exemption under i-Miliki applied to sale and purchase agreements executed from 1 June 2022 to 31 December 2023, so buyers should check the latest stamp duty treatment with LHDN or their lawyer before signing.

For the transfer of property between family, stamp duty on the instruments of transfer of property will be fully exempted for the first RM1 million of the property’s value.

2. Legal fees

If you’re unfamiliar with the proceedings of creating a Sales and Purchase Agreement, you might have to appoint a lawyer to help you with it.

They will prepare all the necessary documents and contracts to facilitate the transfer of the property.

The fees are then calculated as a percentage of the purchase price.

How are legal fees calculated in Malaysia?

The legal fee rates in Malaysia are as below:

PRICE TIER	LEGAL FEE (% of property price)
First RM500,000	1%
RM500,001 – RM 1 million	0.8%
RM1,000,001 – RM 3 million	0.7%
RM3,000,001 – RM 5 million	0.6%
> RM 5 million	0.5%

Note that some developers may absorb the legal fees but you will always need to pay the stamp duty yourself as a buyer.

Read: ENGLISH MARKET INSIGHTS [Latest Update] The Solicitors’ Remuneration Order 2023 (SRO 2023)

3. Property Valuation Fee

A property valuation fee is the amount paid to a professional property valuer to estimate the current market value of a property.

For a home purchase, it is commonly relevant when you apply for a bank mortgage. The bank wants to confirm that the property is worth enough to support the amount it is lending.

Simple example

Suppose you want to buy a house for RM500,000 and apply for a loan of RM450,000.

The bank may appoint or require a registered valuer to assess the property. If the valuation comes back at:

• RM500,000 → the bank may be comfortable with the purchase price.
• RM450,000 → the bank may base its financing on RM450,000 rather than RM500,000, potentially requiring you to provide more cash.
• RM550,000 → this doesn’t necessarily mean you’ll get a larger loan; the bank will still apply its own financing rules.

The valuation typically considers things such as location, property size, condition, comparable recent sales, and current market conditions.

Who pays it?

Usually, the buyer/borrower pays the valuation fee when a valuation is required for the mortgage. It is separate from your legal fees, stamp duty, and down payment.

Also, not every property purchase necessarily involves a separate valuation fee. For example, the bank’s requirements can differ depending on the type of property and financing arrangement.

Financing and Insurance Costs

• Mortgage or fire insurance: Insurance or takaful coverage that may be required as part of the home financing arrangement to protect the property or outstanding loan.
• Loan processing or administrative fees: Charges imposed by the lender for processing and setting up the home loan

4. Home insurance

Most banks will require buyers to purchase insurance on their homes as part of the housing loan package to protect the value of the property.

The common options include:

Mortgage Reducing Term Assurance (MRTA)

• Most popular and economical option

Mortgage Level Term Assurance (MLTA)

• Sum assured remains constant or level throughout the policy period

Term Life insurance

• Oldest and most common life insurance

5. Loan Processing / Administrative Fees

Loan processing / administrative fees are charges that a bank or lender may charge for setting up and processing your home loan.

Think of them as bank-related fees, separate from the lawyer’s fees and government stamp duty.

What might they cover?

Depending on the lender, they may include costs for:

• Processing your loan application
• Credit checks and verification
• Preparing loan documentation
• Opening or setting up the loan account
• Administrative or documentation work
• Other charges related to approving and disbursing the loan

Example

If you’re buying a RM500,000 house and taking a RM450,000 mortgage, the bank may have certain administrative or processing charges associated with setting up the RM450,000 loan.

However, don’t assume every home loan has a separate processing fee. Some lenders may waive these charges or include certain costs elsewhere in the loan package.

In simple terms

Loan processing / administrative fees = fees charged by the lender for handling and setting up your home loan.

It’s also worth checking the bank’s Letter of Offer and loan documents to see exactly which fees apply, because the amount and terminology can vary between lenders.

Moving-In and Ongoing Costs

• Maintenance and sinking fund: For strata properties such as condominiums and apartments, owners typically pay monthly maintenance charges and contributions toward future major repairs.
• Utility and connection fees: Deposits and setup charges for electricity, water, internet, and other essential services.
• Renovation and moving expenses: These may include renovation work, moving services, building management deposits, access cards, and other move-in-related charges

6. Monthly maintenance & sinking fund

When you purchase a property in a strata/gated community, you become a part of a private community that’s managed by a Joint Management Body (JMB).

You’ll typically be making regular contributions to cover these familiar expenses:

1. Maintenance fees: Fees to keep common facilities, like elevators, swimming pools, and gyms, in good working condition, plus other common services such as cleaning and security.
2. Sinking fund: A larger sum of money set aside for unexpected, significant community expenses such as an elevator break down.

It’s a good idea to talk to your JMB to find out how much you’re expected to contribute.

7. Utility fees

Without a doubt, you’ll need basic utilities for your new home – which come at a cost as well.

You’ll need to prepare some allocations for:

1. Electricity from Tenaga Nasional Berhad (TNB)
2. Water supply
3. Sewerage services provided by Indah Water
4. Internet or broadband connection

To sign up for these services, you’ll fill out forms, pay a deposit, and cover fees for installation and paperwork.

8. Furnishings and maintenance

One more thing to take into account is of course, the furnishings and the overall look of your home – including its maintenance.

It can be an additional cost to keep your home looking timeless, especially the things you don’t normally see such as the lawn, the decorations for your balcony, etc.

If your home comes with furniture, remember that there will be an additional penny to pay to take away your unwanted items.

With thoughtful financial planning and a bit of savvy, you’ll be well on your way to making that dream of owning your own space a reality.

9. Malaysian property tax

As a homeowner, you are legally required to pay tax on your property every year. 

Here are some of the types of tax to take note of:

Quit rent (cukai tanah)

• Collected by the state government’s Land Office or Pejabat Tanah Dan Galian (PTG).
• For highrises in some states, quit rent is charged to the Joint Management Body (JMB) and they include it as part of your maintenance charges.

Parcel tax (cukai petak)

• A relatively new tax introduced in Penang and Kuala Lumpur so far.
• It is also collected by the state government’s Land Office or Pejabat Tanah Dan Galian (PTG).
• Parcel tax is equivalent to quit rent for property divided into parcels such as apartments.

Property assessment rates (cukai pintu)

• Property assessment rates are collected by local councils to be used in developing and maintaining local area infrastructure and services such as public parks and garbage collection services.

In short, the cost of buying a home goes well beyond the property’s advertised price.

From the down payment and legal fees to stamp duty, loan-related costs, insurance, valuation fees, renovation, moving expenses, and ongoing maintenance, these additional costs can add up quickly.

Planning for them in advance helps ensure you have enough cash available not only to complete the purchase, but also to settle in comfortably and manage the first few months of homeownership.

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