Upon execution of the Sale and Purchase Agreement, the Homebuyer acquires an interest on the house.The Homebuyer may obtain a loan from the bank to finance his/her acquisition of the house.

1.) Title of the House

A house is issued a title for the piece of land on which the house is erected. It is called as Individual Title. Whereas, Strata Title is issued for the specific area on the specific floor of the building for example the apartment, condominium, town villa or service apartment.

There are two (2) categories of titles: –

  1. Freehold – the Homebuyer acquires a perpetual ownership; and
  2. Leasehold – the Homebuyer acquires an ownership for a certain period. Once the lease has expired, the Homebuyer has to renew it, otherwise the ownership will revert to the State Authority.

Strata Title, either freehold or leasehold, will only be issued approximately 2 to 3 years upon completion of the apartment, condominium, town villa or service apartment.

Land search can be done at the relevant land office or registries in order to know the categories of land, proof of ownership or to obtain any other information of the land.

2.) Foreign Investment Committee (“FIC”) Approval – Economic Planning Unit (“EPU”)

The Economic Planning Unit of the Prime Minister’s Department, reviews and regulates the acquisitions by foreign interests of assets and interests in Malaysian companies and businesses.

Foreigners who wishes to own any real property in Malaysia will be subjected to the guidelines on the acquisition of properties set out by Economic Planning Unit (EPU) Malaysia (hereinafter referred to as “EPU Guideline”).

EPU Guideline states that the foreigners shall only acquires industrial properties valued not less than RM1,000,000-00 of which Item 10 of EPU Guideline has stated as follows: –

Foreign interest is NOT ALLOWED to acquire: –

  1. Properties valued less than RM1,000,000-00 per unit;​
  2. Residential units under the category of low and low-medium cost as determined by the State Authority;
  3. Properties built on Malay Reserved Land; and
  4. Properties allocated to Bumiputera interest in any property development project as determined by the State Authority.

Item 2.2 (c) of EPU Guideline states that the acquisition of industrial land valued at RM1,000,000-00 and above do not require approval by the Economic Planning Unit, Prime Minister’s Department but fall under the purview of the relevant Ministries and/or Government Departments.

However, Item 2.1 of EPU Guideline states that all property acquisitions, except for residential units, that require approval by the Economic Planning Unit, Prime Minister’s Department are as follows: –
Direct acquisition of property valued at RM20 million and above, resulting in the dilution in the ownership of property held by Bumiputera interest and/or government agency; and

Indirect acquisition of property by other tan Bumiputera interest through the acquisition of shares, resulting in a change of control of the company owned by Bumiputera interest and/or government agency, having property more than 50 percent of its total assets, and the said property is valued more than RM20 million

​3.) State Authority Approval

Some land or house is subject to certain limitations of interest in the title which requires State Authority’s Approval under the National Land Code, 1965. These limitations could be found on land which:

  1. State Authority consent and / or Executive Committee Board consent to transfer, charge and / or lease. This is commonly found in leasehold properties. This is also known as restriction-in-interest;
  2. State Authority approval for Malay Reserved Land;
  3. Customary Land in Malacca and Negeri Sembilan; and
  4. Natives land in Sabah and Sarawak

Besides, any acquisition of a house or land by foreign Homebuyer requires State Authority’s Approval, irrespective of the value.

4.) Stamp Duty

Any transfer of ownership of house, the Homebuyer is required to pay stamp duty based on the following scale: –

  1. 1% on the first RM100,000-00 of the purchase price;
  2. 2% on any amount in excess of RM100,000-00 but not exceeding RM500,000-00; and
  3. 3% on any amount in excess of RM500,000-00.
5.) Real Property Gains Tax (“RPGT”)

No RPGT on buying a house from the Housing Developer or any third party.However, upon selling a house by Homebuyer and make a capital gain or profit, the Homebuyer has to pay RPGT on the capital gain or profit.

The operation of budget 2019 have increased a total of 5% tax rate on the categories of 6 years after the date of acquisition. This resulted in individuals no longer being exempted from the tax for properties owned more than 6 years.

Further, non-citizens and companies will have to pay a total of 10% RPGT tax levied for the same category as opposed to 5% previously as follows: –





Within three (3) years after the date of acquisition




In the fourth (4th) year after the date of acquisition




In the fifth (5th) year after the date of acquisition




In the sixth (6th) year after the date of acquisition and thereafter




6.) Lawyers’ Fees

Generally, legal fees are borne by the Homebuyer. However, certain Housing Developers and financial institutions (legal fees for loan only) may offer to pay the legal fees on the legal documentation as part of their marketing package. In addition, some financial institutions also extend financing for the loan documentation fees.

The Lawyer’s fee is subject to Solicitors Remuneration Order 2006.

7.) Financing information

The Homebuyer may apply to any bank and other financial institution which offers different packages of housing loan to assist the Homebuyer in their purchase. Currently, Bank Negara Malaysia (BNM) had announced that the Homebuyer can only obtain housing loan up to 70% for any individuals (not applicable to the Company) who are currently having two outstanding mortgage loans and intend to take on the third loan.

The BNM ruling is also applicable to any loan applications by joint homebuyers/borrowers, if anyone of the homebuyers/borrowers has two outstanding mortgage loans. For example, Mr. A & Ms. B have jointly purchased a new house and applied for a bank loan together. If Mr. A has two existing outstanding mortgage loans, the new loan is only entitled to a maximum of 70% margin.

For houses under construction, the financial institution will release the progressive payment to the Housing Developer based on the claim made upon completion of each construction stage as certified by the Architect.

The Homebuyer can also withdraw their savings from Employees Provident Fund (EPF) to assist in their purchase of a house prior to attaining the age of 50.

8.) Legal Protection for Homebuyer

The Housing Development [Control & Licensing] Act, 1966 and its Regulations provide the following legal protection for Homebuyer: –

(a) Housing Developer requires to obtain: –
  1. Housing Developer’s Licensing; and
  2. Sale and Advertisement Permit;

Prior to any sale of houses to Homebuyer. This is to ensure that the Housing Developer has obtained all approvals before selling the houses.

(b) Homebuyer requires only to sign the Statutory Sale and Purchase Agreement, which is the sale agreement approved by the Government as follows: –
    Click on the Schedule below for further info

  1. Schedule G (for purchases of landed houses); and
  2. Schedule H (for purchases of strata houses i.e. flat, condominium and apartments).
(c) Under the Statutory Sale and Purchase Agreement, the salient terms are as follows: –
  1. Fixed delivery of vacant possession of the house, either 24 months or 36 months from the date of the Statutory Sale and Purchase Agreement. The delivery of vacant possession by the Housing Developer shall be supported by a certificate of completion and compliance certifying that the Building is safe and fit for occupation and includes the handing over of the keys to the Homebuyer;
  2. Failure to deliver vacant possession within the specific period, the Housing Developer must pay late delivery charges at 10% per annum on the purchase price of the house;
  3. Any defects or faults in the house which shall become apparent within 24 months from the date of the delivery of vacant possession, the Housing Developer shall make good at no cost and expenses of the Homebuyer. Payment of the last 5% of the purchase price will be held by a firm of solicitors as stakeholders during this period of 24 months;
  4. Payment of the purchase price of the house by progressive installments based on work done on the house must be supported with Architect’s certificate (s) of the Project;
  5. Upon default by the Purchase and determination of the Sale and Purchase Agreement, the Housing Developer is entitled: –

To deal with or otherwise dispose of a house in such manner as the Housing Developer shall see fit as if the Statutory Sale and Purchase Agreement had not been entered into;

The installments previously paid by the Homebuyers to the Housing Developer, excluding any interest paid, shall be dealt with and disposed of as follows:

Firstly, all interest calculated in accordance with clause 9 of Statutory Sale and Purchase Agreement owing and unpaid shall be paid to the Housing Developer;

Secondly, a sum equal to ten per centum (10%) of the purchase price thereof shall be forfeited to the Housing Developer. [If strata house, the Housing Developer shall entitle to forfeit up to 20% of the purchase price if the house had completed more than 50%]; and

Lastly, the residue thereof shall be refunded to the Housing Developer.

Neither party hereto shall have any further claim against the other for costs, damages, compensation or otherwise under the Statutory Sale and Purchase Agreement; and

Each party hereto shall pay its own costs in the matter.

(d) Tribunal for Homebuyer claims is established to handle claims against the Housing Developer by the Homebuyer arising from any terms of the statutory Sale and Purchase Agreement. This legal procedure is simple, fast and cheap.


(e) Any Housing Developer guilty of an offence under the Housing Development [Control and Licensing] Act, 1966 shall be: –
  1. liable to a fine up to RM250,000-00; OR
  2. imprisonment for a term not exceeding three (3) years; OR
  3. both.

The Housing Developer must open and maintain a Housing Development Account with a bank, where all purchase price must be paid into this Housing Development Account and that any payments from this Account must be in accordance with the purpose(s) stated in the Housing Development (Housing Development Account) Regulations,1991 otherwise the Housing Developer would not be able to make any payments from the Housing Development Account. In addition, the payments are paid vide the financial institution upon request made by the Housing Developer. Further, the Housing Developer is required to maintain a deposit of at least RM250,000-00 as security deposit for the housing development in the Housing Development Account.


The housing law protects the Homebuyer under various Legislations and Regulations.

The housing industry is directly supervised and regulated by the Ministry of Housing and Local Government.

However, some legal requirements will be different if purchase home from the secondary market or completed home. In this case, it is advisable that Homebuyer engages a lawyer to assist him / her to acquire the house.

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