CONSTRUCTION
AGENCY SALES
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Real estate
Guide to Selling Second-hand Properties
When you wish to sell a property for profit, pay attention to Malaysian regulations. CCPS has compiled eight steps for you to follow in the selling process.
01 /
Property Market Research
Before selling a property, please consult the National Property Information Centre (NAPIC) to inquire about the latest transaction prices and volumes. This will help you assess a reasonable selling price and increase the success rate of the sale.
02 /
Professional Real Estate Agent
If you want to sell your property at the best price in the shortest time, it is best to find a professional real estate agent (REA) to assist you. They are professionally trained and familiar with the property buying and selling process, and can quickly help you find buyers and negotiate the best selling price.
03 /
Hire a Lawyer for Assistance
Selling second-hand properties in Malaysia involves many legal procedures, especially concerning title transfers, which require communication with multiple government departments. Having a professional lawyer’s assistance will help you resolve any unclear regulations or difficulties promptly.
04 /
Simple Property Renovation
First impressions are crucial. When selling your property, you should beautify the interior to attract buyers’ attention. If you don’t want to spend too much on renovations, you can ask your real estate agent to identify the most critical areas to renovate.
05 /
Online Sales Platforms
Online sales are one of the best channels and the best method for selling second-hand properties. Taking attractive photos or videos of the property is a great idea, and then promoting it through online sales platforms and social media will yield excellent results.
06 /
Property Purchase Deposit
If a buyer is found and an agreement is reached, both parties will sign a Letter of Offer. During the drafting of this document, the real estate agent will require the buyer to pay an earnest deposit, which is typically 2-3% of the property price.
07 /
Signing the Sale and Purchase Agreement
After signing the Letter of Offer, the buyer must pay a 10% down payment. The remaining 90% must be paid within three months of signing the Sale and Purchase Agreement (SPA). However, the payment timeline may vary depending on the contract terms and property type.
08 /
Payment of Taxes
After the property ownership has been transferred to the buyer, any profit gained must be subject to Real Property Gains Tax (RPGT) payable to the Inland Revenue Board of Malaysia (LHDN). Please refer to the attached chart.
Real Property Gains Taxes (RPGT)
※ RPGT Rates (Effective from 2022 onwards)
In Malaysia, Real Property Gains Tax (RPGT) is calculated on net profit, allowing deductions for acquisition costs, incidental disposal costs, and capital improvements. Key deductible items include legal fees, estate agent commission, stamp duty paid upon purchase, and renovation costs that enhance property value.
1. Deductible Items for RPGT:
- Incidental Costs of Acquisition/Disposal: Legal fees, surveyor fees, agent commissions, and valuation fees incurred during buying or selling.
- Capital Expenditures: Costs incurred to enhance or preserve the value of the property, such as renovations, extensions, or repairs.
- Stamp Duty: Duty paid on the transfer of the property during acquisition.
- Legal Fees for Defending Title: Expenses incurred to establish, preserve, or defend the ownership rights of the asset.
2. Items NOT Deductible:
- Maintenance costs, repair costs (not capital improvement), assessment tax, and quit rent.
- Interest paid on mortgage loans (unless, in specific cases, to reduce income from the property).
3. Exemptions & Reliefs:
- Once-in-a-lifetime exemption: Individuals (citizens/PR) can exempt one residential property gain entirely.
- Partial exemption: RM10,000 or 10% of the chargeable gain (whichever is higher) is exempt for individuals.
- Family Transfers: Transfers between parent/child, spouse, or grandparent/grandchild.
Second-hand Property
4 FEES WHEN SELLING
1. Real Estate Agent Commission
Real estate agent services include: property valuation, advertising, property viewings, assisting with document signing, and negotiation between buyer and seller. A service fee is charged, typically 2-3% of the property sale price, with a maximum of 3%.
2. Renovation and Maintenance
Making your property look attractive before selling is important. This will help increase the selling price and expedite the sale. Generally, it doesn't require a lot of money; a simple coat of fresh paint can give it new life.
3. Legal Consultation Fees
When a buyer is interested in purchasing, you will need a lawyer to provide a legally binding Sale and Purchase Agreement (SPA) and assist you in resolving any potential legal issues with the property. *In Malaysia, lawyer fees for property transactions are calculated based on the property's sale price and generally do not exceed 1% of the transaction price.
4. Real Property Gains Tax
After the payment process and document signing are completed, your property has been successfully sold, and ownership has been transferred to the buyer. At this point, you must pay Real Property Gains Tax (RPGT).
※When selling a home in Malaysia, there are certain unavoidable costs. Before putting your home on the market, ask your professional real estate agent to calculate these costs for you!
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