- Joined
- Dec 17, 2013
- Messages
- 4,115
- Points
- 0
http://business.asiaone.com/news/know-the-steps-selling-your-malaysia-property
1. Foreigners are not allowed to buy properties priced below RM1 million (S$364,000) in Malaysia.
2. Only bumiputeras can buy reserved bumiputera units. Bumiputera owners can sell their units to non-bumiputera Malaysians, but they need to get the state authority's consent.
3. Real Property Gains Tax for foreigners at 30 per cent of the net profit, if the chargeable asset is sold within five years of its acquisition. Chargeable assets sold after ownership of 5-years are taxed to 5 per cent of the net profit.
4. Sellers need to clear all outstanding fees applicable to the property, otherwise there will be a delay in completing the sale such as cukai tanaha (land tax paid annually to the state), and cukai pintu (a local property tax for services provided by the local council).
5. Sellers need to appoint a registered estate agent. Normally, the agent's commission for completing a sale is 2 to 3 per cent of the final sale price.
6. Prospective buyers need copy of the title to the property, renovation plans and copies of the quit rent and assessment receipts for the property to obtain a valuation from a bank to get financing.
7. Selling a property to a foreigner is more complicated than selling to a local. All intended purchases of real estate property, except industrial property, by any foreigner require approval from a state authority. The approvals are subject to payment of a consent fee or 2 per cent of the sale price, whichever is higher. In Johor, the approval process can take as long as six months from the date of application.
8. Legal Fees is 1 per cent for the first RM150,000 of the sale price, 0.7 per cent for the next RM850,000, 0.6 per cent for the next RM2 million, 0.5 per cent for the next RM2 million and 0.4 per cent for the next RM2.5 million. For any sale amount above RM7.5 million, the legal fee rate is negotiable but it cannot be more than 0.4 per cent.
9. Seller must also supply copies of the latest bank mortgage statement, his identity card and passport. If the seller's passport number stated in the title deed or purchase agreement differs from his present passport number, he ought to provide copies of both passports.
10. Option to Purchase deposit aka "earnest deposit" - is usually 1 to 2 per cent of the sale price from buyer. Some option agreements state that the deposit should be refunded to the buyer if he cannot obtain financing. If a seller is not agreeable to this, he should raise the issue.
11. Sellers generally wait 21 to 30 days for the buyer to execute the SPA and pay the balance of the full 10 per cent deposit (negotiable). If the buyer is unable to take these steps, the option usually provides for the failed buyer to forfeit the part deposit to the seller as agreed liquidated damages. Similarly, if the seller has signed the option but no longer wants to sell to the buyer, he has to return the part deposit and provide an equal additional amount as compensation.
12. Thereafter, buyer has 3-6 months to obtain state approval. Buyer may appeal if rejected. If the appeal is rejected, the transaction is aborted and the stakeholder solicitors will return the deposit to the buyer. The seller then looks for a new buyer.
1. Foreigners are not allowed to buy properties priced below RM1 million (S$364,000) in Malaysia.
2. Only bumiputeras can buy reserved bumiputera units. Bumiputera owners can sell their units to non-bumiputera Malaysians, but they need to get the state authority's consent.
3. Real Property Gains Tax for foreigners at 30 per cent of the net profit, if the chargeable asset is sold within five years of its acquisition. Chargeable assets sold after ownership of 5-years are taxed to 5 per cent of the net profit.
4. Sellers need to clear all outstanding fees applicable to the property, otherwise there will be a delay in completing the sale such as cukai tanaha (land tax paid annually to the state), and cukai pintu (a local property tax for services provided by the local council).
5. Sellers need to appoint a registered estate agent. Normally, the agent's commission for completing a sale is 2 to 3 per cent of the final sale price.
6. Prospective buyers need copy of the title to the property, renovation plans and copies of the quit rent and assessment receipts for the property to obtain a valuation from a bank to get financing.
7. Selling a property to a foreigner is more complicated than selling to a local. All intended purchases of real estate property, except industrial property, by any foreigner require approval from a state authority. The approvals are subject to payment of a consent fee or 2 per cent of the sale price, whichever is higher. In Johor, the approval process can take as long as six months from the date of application.
8. Legal Fees is 1 per cent for the first RM150,000 of the sale price, 0.7 per cent for the next RM850,000, 0.6 per cent for the next RM2 million, 0.5 per cent for the next RM2 million and 0.4 per cent for the next RM2.5 million. For any sale amount above RM7.5 million, the legal fee rate is negotiable but it cannot be more than 0.4 per cent.
9. Seller must also supply copies of the latest bank mortgage statement, his identity card and passport. If the seller's passport number stated in the title deed or purchase agreement differs from his present passport number, he ought to provide copies of both passports.
10. Option to Purchase deposit aka "earnest deposit" - is usually 1 to 2 per cent of the sale price from buyer. Some option agreements state that the deposit should be refunded to the buyer if he cannot obtain financing. If a seller is not agreeable to this, he should raise the issue.
11. Sellers generally wait 21 to 30 days for the buyer to execute the SPA and pay the balance of the full 10 per cent deposit (negotiable). If the buyer is unable to take these steps, the option usually provides for the failed buyer to forfeit the part deposit to the seller as agreed liquidated damages. Similarly, if the seller has signed the option but no longer wants to sell to the buyer, he has to return the part deposit and provide an equal additional amount as compensation.
12. Thereafter, buyer has 3-6 months to obtain state approval. Buyer may appeal if rejected. If the appeal is rejected, the transaction is aborted and the stakeholder solicitors will return the deposit to the buyer. The seller then looks for a new buyer.
