Section A: Getting Started
1. Do I really need a lawyer to buy a house? Yes. A lawyer protects your interests, prepares the Sale & Purchase Agreement (SPA), ensures the property has no hidden restrictions, and handles the money transfer to ensure you actually get the ownership title.
2. What is an SPA (Sale & Purchase Agreement)? The SPA is a legally binding contract between the buyer and seller that lists all terms and conditions, including the price, payment details, and deadline for the handover of the property.
3. What is the difference between Freehold and Leasehold? Freehold means you own the land forever. Leasehold means you own the land for a specific period (usually 99 years), and you may need state consent to transfer ownership.
4. Individual Title vs. Strata Title: What’s the difference? Individual Title is for landed properties (you own the land). Strata Title is for high-rise units like condos or apartments (you own the unit, but share the common facilities).
Section B: Costs & Payments
5. How much cash do I need upfront? Usually 10% of the purchase price as a deposit. You also need cash for legal fees, stamp duty, and valuation fees if they are not covered by your loan.
6. Can I withdraw my EPF (KWSP) money to buy a house? Yes, you can withdraw from your EPF Account 2 to pay the deposit, pay down the loan, or pay monthly installments.
7. What are Legal Fees based on? Legal fees are calculated based on a standard scale (SRO 2023) mandated by law. It is roughly 1.25% for the first RM500,000 and 1% for the next RM7 million.
8. What is Stamp Duty? It is a tax paid to the government to validly transfer the property to your name. It is calculated in tiers (1% to 4% depending on the property price). First-time buyers may get exemptions.
9. What is the "Differential Sum"? It is the difference between the Purchase Price and your Loan Amount. If the house is RM500k and your loan is RM450k (90%), the Differential Sum is RM50k, which you must pay in cash.
Section C: The Process & Timeline
10. How long does the process take? For a sub-sale (second-hand) property with an individual title, it typically takes 3 months + 1 month extension period from the date the SPA is signed/conditions met.
11. What happens if I cannot pay on time? (Late Payment Interest) If the full payment is not made within the completion period (usually 3 months), the seller can charge you interest (usually 8% per annum) on the unpaid balance calculated daily.
12. Can I cancel the purchase after signing the SPA? You can, but you will likely forfeit your 10% deposit. You may also have to pay legal costs incurred up to that point.
13. What happens if my bank loan is rejected? If your SPA has a specific clause making the purchase "subject to loan approval," you can cancel and get your deposit back (minus a small fee). Without this clause, you forfeit the deposit.
14. What is "Vacant Possession"? This is the moment you get the keys to the house and can move in. It usually happens after the seller has received the full payment.
Section D: After Purchase
15. What is "MOT" (Memorandum of Transfer)? The MOT is the specific legal document (Form 14A) used to transfer the name on the land title from the seller/developer to you.
16. What is "Perfection of Transfer"? If you buy a property where the separate title has not been issued yet, you must legally transfer the title to your name later when the title is finally issued. This process is called "Perfection."
17. Do I have to pay taxes when I sell the house later? (RPGT) Yes, if you sell within 5 years and make a profit, you may pay Real Property Gains Tax (RPGT). After 5 years, the tax rate is usually 0% for Malaysian citizens.
18. How do I change the utility bills (TNB/Air/Indah Water) to my name? Once you have the keys (Vacant Possession), you take a copy of the SPA and your IC to the utility providers to open a new account in your name.
19. What is the Defect Liability Period (DLP)? For brand new houses from a developer, there is a warranty period (usually 24 months) where the developer must fix any defects for free. This does not apply to second-hand (sub-sale) houses.
20. Can foreigners buy property in Malaysia? Yes, but with restrictions. Generally, foreigners can only buy properties priced above RM600,000 or RM1 million (depending on the specific state rules).