How Much You Need To Prepare When Buying A Property?

Many have the notion that when you buy a property, all you need to fork out is the 10% down payment and monthly instalment fees. Many do not know that there are actually many more additional costs when it comes to buying a property!

Make sure you have saved enough beforehand so that your dream of owning a property does not get halted by the shortcomings in fund especially when you’ve done all your researched beforehand and picked the property you like best. Here are some additional fees you have to incur when buying a property.

1. Sales and Purchase Agreement Fees for 2021

For the first RM500,000: 1% (Subject to a minimum of RM500)
For the subsequent RM500,000: 0.8%
For the subsequent RM2 million: 0.7%
For the subsequent RM2 million: 0.6%
For the subsequent RM2.5 million: 0.5%

2. Loan Agreement Fees for 2021

For the first RM500,000: 1% (Subject to a minimum of RM500)
For the subsequent RM500,000: 0.8%
For the subsequent RM2 million: 0.7%
For the subsequent RM2 million: 0.6%
For the subsequent RM2.5 million: 0.5%

3. Stamp Duty Fees for 2021

For properties priced at RM100,000: 1%
For properties priced from RM100,001 to RM500,000: 2%
For properties priced from RM500,001 to RM1 million: 3%
For properties priced RM1 million and above: 4%

*Do take note that in the recent Budget 2021 announcement, a full stamp duty exemption will be given to both instrument of transfer and loan agreement for the purchase of a first home worth not more than RM500,000. The condition is that the SPA has to be completed between January 2021 to December 2025.

4. Valuation Fees

If you are buying a property in the secondary market and if you are applying for a loan to finance the property. A valuation company will evaluate the market value of the property before any credit application takes place.

5. Stamp Duty for the Memorandum of Transfer or Deed of Assignment

The MOT is a transfer instrument under the National Land Code 1965 for transfer of ownership from the seller to the buyer after the signing of the SPA.

6. Quit Rent

Also known as cukai tanah which must be paid to relevant land office by May 31 annually.

7. Utility Bills

Such as to Indah Water Konsortium to maintain and operate underground sewerage pipelines as well as the treatment plants.

8. Differential Sum

Between the balance purchase price and the loan amount if you are unable to obtain a favourable loan margin.

9. Maintenance Fee

For strata development based on share unit basis.

10. Property Assessment Tax

Which is collected by the local authority for the construction and maintenance of public infrastructure under its area of jurisdiction such as upgrading works, road repairs and cleaning services.

11. Mortgage Insurance

Where you have a choice of mortgage reducing term assurance (MRTA)/mortgage decreasing term assurance (MDTA) and mortgage level term assurance (MLTA).

12. Home Insurance

Including the homeowners’ fire insurance policy, householders’ insurance policy which covers household contents including moveable possessions as well as fatal injury coverage on the person insured and insurance policy which covers loss and damage to fixtures, fences, walls and gates from events such as theft, flood and burst pipes.

13. Lawyer Fees

To prepare the SPA and loan facility agreement which will entail the handling of the necessary documents.

14. Stamp Duty for Facility Agreement

(Principal copy) where a lender, such as a financial institution, sets out the terms and conditions on which it is prepared to loan money to the borrower.

15. Renovation Costs

For upgrades such as wardrobes, kitchen cabinets, electrical appliances and furniture.

Make sure you prepare beforehand all these additional costs to avoid disappointment when you have scored the property which you want to buy.

[Image source: Photo by Suzy Hazelwood from Pexels]