Real Estate Structural Charges
Table 1: Summary of Real Estate Transactions & Hidden Charges and Load Margin (LTV)
| Buyer Type | Estimated Transaction Charges (Subject to change by developer) | Possible Hidden Charges | Loan Margin (LTV) |
|---|---|---|---|
| First-home Buyer | 1.) Booking Fee: ~2–3% (inclusive in down payment but pay before SPA) 2.) Downpayment: ~10% 3.) SPA Legal Fees (SRO scale) 3.) SPA Stamp Duty: Tiered 1%-4% (Exemption up to RM500k) 4.) Loan Legal Fees (SRO scale) 5.) Loan Stamp Duty: 0.5% of loan | – Valuation Fee – MRTA/MLTA Insurance (~2–4% of loan) – Sinking Fund – First Month Maintenance Fee – Disbursements (RM500–RM1,500) | Up to 90% (sometimes 100% under special schemes like MyFirstHome) |
| Second-home Buyer | 1.) Booking Fee: ~2–3% (inclusive in downpayment but pay before SPA) 2.) Downpayment: ~10% 3.) SPA Legal Fees (SRO scale) 4.) SPA Stamp Duty: Full tiered 1%-4% 5.) Loan Legal Fees (SRO scale) 6.) Loan Stamp Duty: 0.5% of loan | – Same as first-home – Higher insurance premium possible – Similar valuation/disbursements | Up to 90% (depends on bank) |
| Third-home Buyer & Above | 1.) Booking Fee: ~2–3% (inclusive in downpayment but pay before SPA) 2.) Downpayment: ~10% 3.) SPA Legal Fees (SRO scale) 4.) SPA Stamp Duty: Full tiered 1%-4% 5.) Loan Legal Fees (SRO scale) 6.) Loan Stamp Duty: 0.5% of loan | – Same as second-home – Higher insurance premium likely – Stricter valuation and bank checks | ~70% cap (if first and second home not yet paid off) |
Table 2: Quick Comparison with reference
| Item | SPA Legal Fees | SPA Stamp Duty | Loan Agreement Legal Fees | Loan Agreement Stamp Duty |
|---|---|---|---|---|
| Example: RM300,000 Property | Calculation: – First RM500K = 1% – 1% × 300,000 = RM3,000 – Plus 6% SST = RM180 – Total ≈ RM3,180 | Calculation: – First RM100K @1% = RM1,000 – Next RM200K @2% = RM4,000 – Total = RM5,000 First-home buyers exempted up to RM500K | Calculation: – First RM500K = 1% – 1% × 270,000 = RM2,700 (loan amount 90% of RM300K) – Plus 6% SST = RM162 – Total ≈ RM2,862 | Calculation: – 0.5% × 270,000 = RM1,350 |
| Example: RM700,000 Property | Calculation: – First RM500K @1% = RM5,000 – Next RM200K @0.8% = RM1,600 – Total = RM6,600 – Plus 6% SST = RM396 – Total ≈ RM6,996 | Calculation: – First RM100K @1% = RM1,000 – Next RM400K @2% = RM8,000 – Next RM200K @3% = RM6,000 – Total = RM15,000 First-home exemption only applies up to RM500K | Calculation: – First RM500K @1% = RM5,000 – Remaining RM130K @0.8% = RM1,040 – Total = RM6,040 (loan amount 90% of RM700K = RM630K) – Plus 6% SST = RM362.40 – Total ≈ RM6,402 | Calculation: – 0.5% × 630,000 = RM3,150 |
| Quick References | – Solicitors’ Remuneration Order (SRO) 2023: • First RM500K @1% • Next RM500K @0.8% • Next RM2M @0.7% • Next RM2M @0.6% • Next RM2.5M @0.5% • Above RM7.5M @0.4% Source: Malaysian Bar Council | – Stamp Duty Act Malaysia (LHDN): • First RM100K @1% • Next RM400K @2% • Next RM500K @3% • Above RM1M @4% Source: LHDN Official Guide | – Same as SPA legal fees (SRO 2023), calculated based on loan amount. Source: Malaysian Bar Council | – 0.5% of total loan amount. Source: LHDN Official Guide |
Summary Notes
SPA Legal Fees – Tiered percentage based on property price | Subject to 6% SST (Service Tax).
SPA Stamp Duty – Tiered percentage based on property value | First-home buyers enjoy exemption up to RM500,000 [ 1 January 2021 and 31 December 2025, ey]
Loan Agreement Legal Fees – Follows same tiered structure as SPA legal fees, but calculated on loan amount instead of property price.
Loan Agreement Stamp Duty – Flat 0.5% of loan amount.
Common Types of Disbursement Fees in Malaysia (Case-by-Case Basic)
Below are the typical disbursement items you might see in a lawyer’s bill:
| Disbursement Item | Purpose | Estimated Cost (RM) |
|---|---|---|
| Land Search Fee | To check land title status at the Land Office (ownership, encumbrances, caveats). | 30 – 100 |
| Land Registration Fee | Payable to the Land Office to register transfer of ownership (title deed). | 100 – 500 |
| Title Deed Fee | Issuance of new title deed under buyer’s name. | 50 – 200 |
| Statuary Declarations / Attestations | Legal declarations required for certain transactions. | 50 – 200 |
| Bankruptcy Search | To confirm that buyer and seller are not declared bankrupt. | 12 – 20 per person |
| Company Search (if company is involved) | To check company’s registration and financial standing at SSM. | 15 – 50 |
| Courier / Postage Fees | Sending original signed documents between parties and authorities. | 30 – 150 |
| Photocopying / Printing Fees | For copies of agreements, land titles, and supporting documents. | 30 – 100 |
| Miscellaneous | Other minor administrative expenses. | 50 – 200 |
Key Points About Disbursements
For most transactions, RM1,000 – RM2,000 is common for residential property purchases.
Separate from Legal Fees – Legal fees are what you pay for the lawyer’s professional services. | Disbursements are actual third-party costs that the lawyer pays first, then bills you later.
Mandatory for Registration Process – These fees are essential for tasks like land title searches, registering ownership, and stamp duty submission.
Amount Varies by State – Different states in Malaysia may have slightly different charges, especially for land registration fees.
MRTA vs MLTA – What They Are
| Type | Full Name | Purpose | Coverage | Payment Type |
|---|---|---|---|---|
| MRTA | Mortgage Reducing Term Assurance | Pays off outstanding loan if borrower dies or becomes permanently disabled. | Sum assured decreases as loan balance reduces. | One-time premium upfront |
| MLTA | Mortgage Level Term Assurance | Similar to MRTA, but sum assured remains fixed throughout policy term. | Beneficiary gets lump sum, not just bank payoff | Paid annually/monthly or single premium |
- MRTA is cheaper because coverage reduces over time.
- MLTA is costlier but offers more flexibility (beneficiary can keep surplus).
MRTA/MLTA Calculation Method
Difference Between MRTA vs MLTA
1. MRTA (Mortgage Reducing Term Assurance)
MRTA is single premium, paid upfront or financed into your loan.
It decreases over time as your loan balance decreases.
Formula:
MRTA Premium=Loan Amount × MRTA Rate× (Loan Tenure (Years) /100)
Where:
- MRTA Rate is typically between 0.30 – 0.60 depending on age & gender.
- Younger borrower → lower rate
- Older borrower → higher rate
Example Calculation
- Loan Amount = RM300,000
- Loan Tenure = 35 years
- Assume MRTA rate = 0.40 (e.g., borrower age 30–35)
MRTA Premium=300,000×0.40× 35/100 ==RM42,000
Estimated MRTA Premium: RM42,000 (one-time payment)
2. MLTA (Mortgage Level Term Assurance)
MLTA is yearly renewable and coverage remains level throughout the loan.
It’s more flexible because it can have cash value and remains even if you sell or refinance your property.
Formula (Annual Premium):
Annual MLTA Premium=Loan Amoun × MLTA Rate
Where:
- MLTA Rate usually ranges from 0.30% – 0.80% of the loan amount, depending on age and health.
Example Calculation
- Loan Amount = RM300,000
- Assume MLTA rate = 0.50% (0.5 /100 – 0.005)
Annual MLTA Premium=300,000×0.005=RM1,500 per year
Over 35 years: Total MLTA Premium=1,500×35= RM52,500
Comparison Table
| Item | MRTA (One-Time) | MLTA (Yearly) |
|---|---|---|
| Payment Type | Single upfront payment | Annual / monthly premiums |
| Coverage Trend | Reduces as loan balance drops | Level (fixed sum assured) |
| Transferable | ❌ No | ✅ Yes |
| Estimated Premium | ~RM42,000 (once) | RM1,500/year → RM52,500 total |
| Cash Value | ❌ None | ✅ Possible (depends on policy) |
1. MRTA (Mortgage Reducing Term Assurance)
MRTA is one-time, based on age + tenure.
Formula reminder: MRTA Premium=Loan Amount× MRTA Rate × (Tenure (Years)/100)
| Age Group | Loan Tenure (Years) | Typical MRTA Rate (% of Loan × Tenure Factor) |
|---|---|---|
| 25 – 30 yrs | 20 – 25 | 0.25 – 0.30 |
| 26 – 30 | 0.28 – 0.33 | |
| 31 – 35 | 0.30 – 0.35 | |
| 31 – 35 yrs | 20 – 25 | 0.30 – 0.35 |
| 26 – 30 | 0.33 – 0.38 | |
| 31 – 35 | 0.35 – 0.40 | |
| 36 – 40 yrs | 20 – 25 | 0.35 – 0.40 |
| 26 – 30 | 0.38 – 0.43 | |
| 31 – 35 | 0.40 – 0.45 | |
| 41 – 45 yrs | 20 – 25 | 0.40 – 0.45 |
| 26 – 30 | 0.43 – 0.48 | |
| 31 – 35 | 0.45 – 0.50 | |
| 46 – 50 yrs | 20 – 25 | 0.45 – 0.50 |
| 26 – 30 | 0.48 – 0.53 | |
| 31 – 35 | 0.50 – 0.55 | |
| 51 – 55 yrs | 20 – 25 | 0.50 – 0.55 |
| 26 – 30 | 0.53 – 0.60 | |
| 31 – 35 | 0.55 – 0.65 | |
| 56 – 60 yrs | 20 – 25 | 0.60 – 0.70 |
| 26 – 30 | 0.65 – 0.75 | |
| 31 – 35 | 0.70 – 0.80 |
2. MLTA (Mortgage Level Term Assurance)
MLTA premiums are yearly renewable, and tenure affects total cost rather than the annual rate.
Annual MLTA Premium=loan amount ×MLTA %=RM X per year
Over loan tenure years: Total MLTA Premium= RM X per year × loan tenure years
| Age Group | Loan Tenure (Years) | MLTA Annual Premium % of Loan | Total Cost Over Tenure |
|---|---|---|---|
| 25 – 30 yrs | 20 – 25 | 0.30% – 0.35% | RM1,050 – RM1,225 × Years |
| 26 – 30 | 0.32% – 0.37% | RM1,120 – RM1,295 × Years | |
| 31 – 35 | 0.33% – 0.40% | RM1,155 – RM1,400 × Years | |
| 31 – 35 yrs | 20 – 25 | 0.40% – 0.45% | RM1,400 – RM1,575 × Years |
| 26 – 30 | 0.42% – 0.47% | RM1,470 – RM1,645 × Years | |
| 31 – 35 | 0.45% – 0.50% | RM1,575 – RM1,750 × Years | |
| 36 – 40 yrs | 20 – 25 | 0.50% – 0.55% | RM1,750 – RM1,925 × Years |
| 26 – 30 | 0.52% – 0.57% | RM1,820 – RM1,995 × Years | |
| 31 – 35 | 0.55% – 0.60% | RM1,925 – RM2,100 × Years |