{"id":81337,"date":"2024-04-01T10:34:26","date_gmt":"2024-04-01T02:34:26","guid":{"rendered":"https:\/\/iqiglobal.com\/blog\/?p=81337"},"modified":"2026-01-09T16:02:10","modified_gmt":"2026-01-09T08:02:10","slug":"residential-vs-commercial-title","status":"publish","type":"post","link":"https:\/\/iqiglobal.com\/blog\/residential-vs-commercial-title\/","title":{"rendered":"Know the Difference: Residential vs Commercial Titles. Understand with Just 3 Easy Points!"},"content":{"rendered":"\n

Some of the contents of this article were contributed by Chloe from VC Estate<\/a>.<\/strong><\/em><\/p>\n\n\n\n

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Have you ever encountered an article discussing “Residential and Commercial Titles” and found yourself pondering its meaning?<\/p>\n\n\n\n
I know, I’ve been in that situation too. However, now I can finally share to you how these two differentiate between one another and in the most simple way possible.<\/p>\n\n\n\n
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Residential vs Commercial Titles: Explained<\/h2>
1. Residential vs Commercial Title<\/a>
Definition<\/a><\/li>
SoHo – Small Office, Home Office<\/a><\/li>
SoFo – Small Office, Flexible Office<\/a><\/li>
SoVo – Small Office, Virtual Office<\/a><\/li><\/ul><\/li>
2. Difference Between Residential and Commercial Titles<\/a>
Utilities<\/a><\/li>
Loan Margins and Financing<\/a><\/li>
Legal and Statutory Protection<\/a><\/li><\/ul><\/li>
3. Can I Change From Commercial to Residential Title?<\/a><\/li>
4. Should you invest in residential or commercial property?<\/a><\/li>
5. Conclusion<\/a><\/li><\/ul><\/div>\n\n\n\n
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1. Residential vs Commercial Title<\/h2>\n\n\n\n
Definition<\/strong><\/h3>\n\n\n\n
Residential Title<\/strong> – Developments for living purposes<\/strong> like bungalows, semi-detached (semi-Ds), terrace houses, townhouses, apartments, flats, and condominiums.<\/p>\n\n\n\n
Commercial Title<\/strong> – Developments for business purposes<\/strong> like office lots, shop lots, hotels, and mixed development falls under a commercial title.<\/p>\n\n\n
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$\"residential$ <\/figure>\n<\/div>\n\n\n
Did you know? You can be in a serviced apartment (residential title), make a business<\/strong> in your apartment and it will be called a commercial title?<\/p>\n\n\n\n
Yes you heard that right!<\/p>\n\n\n\n
Developers have created a new real estate trend<\/strong> where they sell residences for customers that want to work from home<\/strong> while being in a commercial title. This makes the developments more appealing.<\/p>\n\n\n\n
There are 3 categories<\/strong> in a serviced apartment, let’s break it down together shall we?<\/p>\n\n\n\n
SoHo – Small Office, Home Office<\/strong><\/h3>\n\n\n\n
Example: If you are a newlywed or a couple that is planning on starting a business together at home, SoHo is the perfect home for you as it can become your home + office.<\/p>\n\n\n\n
SoFo – Small Office, Flexible Office<\/strong><\/h3>\n\n\n\n
Example: If you want a space that provides a removable wall inside, this is your ideal home! You are free to customize your own home be it for living or working.<\/p>\n\n\n\n
SoVo – Small Office, Virtual Office<\/strong><\/h3>\n\n\n\n
Example: If you are a start-up business that is solely looking for a home with more office equipments<\/strong>, SoVo is the one for you! Heads up, these units are exclusively for commercial use only<\/strong> and you can’t renovate them.<\/p>\n\n\n\n
2. Difference Between Residential and Commercial Titles<\/h2>\n\n\n\n
Utilities<\/strong><\/h3>\n\n\n
\n
$\"utilities$ <\/figure>\n<\/div>\n\n\n
Residential title:<\/strong> The properties tend to have cheaper utilities <\/strong>and taxes bills compared to commercial title development.<\/p>\n\n\n\n
Commercial title:<\/strong> The properties have an increase of 2.5 times <\/strong>(30%-50%) more on their utilities and taxes bills compared to residential title developments.<\/p>\n\n\n\n
This also includes serviced apartments<\/strong> that are considered as commercial titles.<\/p>\n\n\n\n
Loan Margins and Financing<\/strong><\/h3>\n\n\n
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$\"loans$ <\/figure>\n<\/div>\n\n\n
Residential title:<\/strong> For residences, you can purchase a property using 90% – 100% loan from the bank. <\/p>\n\n\n\n
However, you would need to have a credit score of over 720<\/strong> or a monthly income of at least RM6,000<\/strong> (for a RM500k house) to get a home with this much loan.<\/p>\n\n\n\n
Commercial title: <\/strong>The first two properties that you purchase can go with a 85% loan. However, the third property will only be eligible for 70% loan.<\/p>\n\n\n\n
For serviced apartments, because they are under commercial title<\/mark><\/a>, consumers can purchase these properties with a loan of up to 80% <\/strong>from the bank alongside a down-payment of 20%.<\/strong><\/em><\/p>\n\n\n\n
Legal and Statutory Protection<\/strong><\/h3>\n\n\n
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$\"legal$ <\/figure>\n<\/div>\n\n\n
Residential title:<\/strong> Properties under residential titles tend to have fewer legal complexities and do not require much agreements to it. This makes the process more straightforward for buyers and sellers.<\/p>\n\n\n\n
For residential titles under the Housing Developers (Control and Licensing) Act 1966 (HDA)<\/strong>, you can solve buyer-related problems through the Homebuyer’s Tribunal.<\/p>\n\n\n\n
Also, properties under the HDA need to have running water and electricity<\/strong> before they are considered to be ready for possession.<\/p>\n\n\n\n
Commercial title:<\/strong> Properties under commercial titles on the other hand has more legal complexities like permit and lease agreements<\/strong>.<\/p>\n\n\n\n
Unlike residential titles, if you have any problems regarding your commercial property, you can only seek remedy in court which can be very expensive because of the lawyer fees.<\/p>\n\n\n\n
For commercial properties, you can handover for vacant possession even if the property is not ready for occupation and is waiting for the certificate of completion and compliance (CCC)<\/strong>.<\/p>\n\n\n\n
3. Can I Change From Commercial to Residential Title?<\/h2>\n\n\n\n
$\"\"$ <\/figure>\n<\/div>\n\n\n
Answer: Yes! You can change the title but ONLY<\/strong> if you want to use the property for another use other than the original title.<\/p>\n\n\n\n
Did you know? Changing your title comes with a price. You will need to pay a premium to the Land Office when you’re applying for a title conversion.<\/p>\n\n\n\n
Also, your TNB tariff will also change when you change from commercial to residential title (cheaper of course). But on top of that, you need to register at myTNB portal<\/mark> <\/a>or myTNB app and pay RM10 of duty stamp which will be charged on your next upcoming bill.<\/p>\n\n\n\n
4. Should you invest in residential or commercial property?<\/h2>\n\n\n\n
The question in mind now is, “Is it better to invest<\/strong> in residential or commercial<\/strong> property?”<\/p>\n\n\n\n
Chloe from VC Estate<\/strong> breaks down the costs<\/strong> of buying a residential vs commercial property, highlighting the pros and cons<\/strong> for a first property<\/strong>:<\/p>\n\n\n\n

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