Hidden Costs When Buying a Property

What this hidden costs buying property guide covers

Most buyers plan for the deposit and the legal fees. What gets missed are the smaller costs, which are numerous, and which add up to several thousand ringgit.

Disbursements: the earliest hidden costs buying property

These are actual costs paid out on your behalf, separate from legal fees. They include official land searches, a bankruptcy search on the seller, land office fees for registering the transfer and the charge, delivery of documents, printing and copies.

As a reference, the land office fee for registering a transfer in Selangor is RM400 and for registering a charge RM100. Total disbursements are usually between RM800 and RM1,500 for an ordinary residential transaction.

Service tax

Service tax of 8% applies to legal fees since 1 March 2024. For a transaction with combined legal fees of RM12,000, that is an additional RM960.

Hidden costs buying property at handover

For strata property, maintenance charges and a contribution to the sinking fund normally have to be settled before keys are handed over. Utility deposits for electricity and water also need to be provided.

Quit rent and assessment are apportioned at the handover date. If the seller has paid for a period extending past handover, the buyer reimburses their share.

Hidden costs buying property after moving in

For a subsale property, renovation, cleaning and changing the locks are things rarely included in the initial budget. They are not legal costs, but they are part of the real cost of moving in.

Costs that appear after you move in

Assessment and quit rent start in the year you become the owner, and some buyers forget to include them in the first year’s budget.

For strata property, maintenance charges and the sinking fund are billed monthly. Rates differ by project and unit size, and a special levy can be raised when major works are approved at a general meeting.

Fire insurance is required by the bank throughout the loan. For strata property the building insurance is usually handled by the management body, but contents insurance remains your responsibility.

How to budget so you are not caught short

Split the money into three parts. First, the deposit and the costs at signing. Second, stamp duty and legal fees payable before registration. Third, the costs after handover such as renovation, furniture and the first utility bills.

Do not put every ringgit of savings into the deposit. Buyers who exhaust their savings at the first stage often end up borrowing at a higher rate to pay stamp duty a few months later.

Use the fee calculator on this site for an estimate, then add a margin for the possibility that the valuation comes in above the purchase price.

Where costs differ between subsale and a developer purchase

On a developer purchase some costs are absorbed into the package offered and some are not. Read what the package actually covers before setting a budget.

On a subsale nearly every cost falls on the buyer separately, so the estimate has to be more detailed.

For both, progressive release of funds and interest during construction are the items first-time buyers most often leave out of the calculation.

Questions worth asking before signing

The full list of costs from today until the day I get the keys.

Which costs fall at signing, and which a few weeks later.

Whether the estimate assumes a stamp duty exemption, and whether I qualify.

What costs arrive after I move in, such as maintenance charges and assessment.

How much margin to set aside in case the valuation comes in higher.

Frequently asked questions about hidden costs buying property