Guideline on Cost for Legal Fee & Stamp Duty for House Purchase

STAMP DUTY ON MOT

VALUE:
FIRST RM100,000-00 OR BELOW	1%
RM100,001-00-RM499,999-00	2%
RM500,000-00 AND ABOVE	3%

REGISTRATION FEES ON MOT (WILAYAH PERSEKUTUAN KL LANF OFFICE) = RM100-00 (IRRESPECTIVE OF VALUE)

REGISTRATION FEES ON MOT (SELANGOR LAND OFFICE)

VALUE:
RM50,000-00 OR BELOW	RM50-00
RM50,001-00 – RM200,000-00	RM200-00
RM200,001-00 – RM500,000-00	RM400-00
RM500,001-00 – RM1,000,000-00	RM500-00
RN1,000,001-00 OR ABOVE	RM1,500-00

PROFESSIONAL FEES BY LAWYER (Does not include Disbursement fee)

VALUE:
FIRST RM150,000-00 OR BELOW	1%  (MININUM FEE IS RM300-00)
RM150,001-00 – RM1,000,000-00	0.7%
RM1,000,001-00 – RM3,000,000-00	0.6%
RM3,000,001-00 – RM5,000,000-00	0.5%
RM5,000,001-00 – RM7,500,000-00	0.4%
> RM7,500,000-00	NEGOTIABLE BUT SHALL NOT EXCEED 0.4%

Example of Disbursements :

Stamp duty on Receipt and Reassignment

Revocation on Power of Attorney

Registration fee for Consent to Transfer

Certified Title for Consent to Transfer

Application for Consent to Transfer

Stamp duty on Statutory Declaration

Affirmation fee on Statutory Declaration

Land Search

Bankruptcy Search

Printing / Photostating / Telephone / Fax / Postage / Transport

Miscellaneous

 Prices are for guideline only,SUBJECT TO CHANGE.

Foreigners Purchase Property in Malaysia

Participants of Malaysia My Second Home Programme are provided with various incentives to make their stay more comfortable and enjoyable in Malaysia.

House Purchase

Please be informed that property purchase is not a pre-requisite for participating in MM2H programme. Any foreigner may purchase any number of residential property in Malaysia, subject to the minimum rates established for foreigners by the different states. They start from RM500,000 per unit for most states, from 1st January 2010. Land is a state matter and it is important to check state laws before making any commitment, as the minimum purchase price is not standardised between states. We advise buying homes which are already issued with certificates of fitness but if you intend to purchase from developers, ensure that it is a reputable company. Also ensure that your lawyer does a thorough check with the local land office that you have ownership rights to any property that you are purchasing. Profit made on the sale of property is 5% (Real Property Gains Tax).

Banks also offer the Malaysia My Second Home (MM2H) Financing package which is available to foreigners who participate in the MM2H programme*. The MM2H Financing package is for completed residential properties with Certificate of Fitness at minimum prices of RM500,000 and offers loan tenures from 5 years to 20 years or up to 70 years of age, whichever is earlier, with a margin of financing of up to 85%. To apply, bring the completed bank application form (available from www.cimbbank.com.my) together with your passport, letter from the Ministry of Tourism certifying participation in the MM2H programme, S&P and income plus employment documents, where applicable, to your nearest Bank branch.

*For more information about MM2H programme visit www.mm2h.gov.my.

My First Home Scheme

Scheme launched for young adults to get 100% financing for new home

Young working adults can now buy themselves a new home without having to pay a sen in down payment.

Those earning less than RM3,000 a month can obtain up to 100% financing to buy their first home under a new scheme launched yesterday.

The My First Home Scheme, launched by Prime Minister Datuk Seri Najib Tun Razak on March 09,2011 will enable them to buy houses costing between RM100,000 and RM220,000 with a repayment period of up to 30 years.

The scheme sees the participation of 25 conventional and Islamic financial institutions including major banks like AmBank, CIMB, Hong Leong, Maybank, Public Bank, RHB and Standard Chartered.

To qualify for the scheme, which is for both houses under construction and completed properties, house buyers must be those working in the private sector and are confirmed employees with a minimum of six months in the job.

The self-employed do not qualify for the scheme while joint applications are allowed, provided that both are in the private sector and are family members, such as siblings or spouses.

The monthly financing repayment sum must also be not more than one-third of the applicants’ monthly gross income.

However, this sum can go up to 50% of their income if additional credit is permitted under the banks’ underwriting policy.

The Government through Cagamas Berhad – a national mortgage corporation – will bear the costs of the initial 10% deposit for the house while normal interest or profit rates for Islamic banks apply under the scheme.

The scheme does not cover refinancing of a home. The scheme would enable young adults in the country to own their first home within a short time.

“This scheme is a government initiative to help the young citizens as well as to inculcate confidence and desire in them to own houses.

“It is also part of the Government’s objective to provide affordable housing to all Malaysians in rural and urban areas,” he said.

What To Look for In An Investment Property

What to look for in an investment property

- location, type, rental returns
A great investment property is one that meets your investment objectives such as your target rate of return, investment time horizon and any other criteria you might have.
Main determinants of property value include:
Location - this should be assessed with the target market in mind to determine whether there will be demand by the target market for this location.
Also research the historical rate of property value appreciation in that particular location for similar properties.
Property type and size dimension- residential and commercial properties each have their peculiarities, and dependent on the location, attracts different tenant profiles.
Rental Returns - find out how much rent the property can fetch by researching the rental values of similar properties in the area, and ascertain the estimated costs to own and maintain such property.
Cash flow - evaluate the property's potential to generate income as against cash outflows. Obvious preference is to have the investment property cash flow positive as soon as possible.
* Total Return comprises net rental income and capital gain over the five year investment horizon; computed using the internal rate of return formula Personal Fund(s) Leveraged Rental (Net) Yield per annum 6.18% 6.80% Total Return per annum* 11.11% 23.52% Following the same example above, if you were to sell the property 5 years later for RM850,000, the capital gain would be: RM850,000 - RM650,000 = RM200,000 one-time gain, or (RM850,000 - RM650,000)/RM650,000 x 100 = 30.77% over the original purchase price.Taking into account the leverage (borrowing) effect, the Leveraged Capital Gain would be (RM850,000 - RM650,000)/RM150,000 x 100 = 133.33% over the initial capital The total return yield from an investment property is the rental yield plus the capital gain over the investment tenor.

Buying your investment property.
The buying process will involve the following activities and decisions :
Determine the type of property to invest - Commercial, residential, land, etc.
Assess financial and borrowing capacity,
Determine budget and price of property to invest in.
Find your investment property.
Negotiate on purchase price.
Sign Offer of Purchase & place earnest deposit / booking fee.
Complete and execute Sales and Purchase Agreement (S&P).
Pay balance of deposit.
Apply for bank financing, if required.
Appoint valuer to conduct valuation of the property.
Sign financing facility agreement.
Pay balance of the purchase price.
Get keys to the property.
Renovate.
Source for tenant.
Receive rental income!!Get

Find The Right Property To Invest

Finding the right property to invest.The hunt for an ideal investment property can take much time and effort. Then, when you finally find a great deal, you might want to leverage on other people’s money to increase your investment returns.
How to calculate return on investment.
There are two components of returns :
1. Rental Yield per annum 
2. Capital Gain.
Rental yield per annum is the percentage return based on rental income from the property less expenses incurred to maintain the property versus the total purchase price of the property.Here is a simple method to calculate the rental yield on property investment.Assuming you purchase a property for RM650,000 inclusive of legal and other related costs, receive rental income of RM3,800 per month, and in turn, incur total expenses of RM5,400 per year to maintain the property.The Gross Rental Yield would be calculated as follows: RM3,800 x 12 = RM45,600 per annum rental income (RM45,600/RM650,000) x 100 = 7.02% per annumThe Net Rental Yield is computed as (RM45,600 - RM5,400)/RM650,000 x 100 = 6.18% per annumAssuming you take an interest-only loan of RM500,000 to finance the property purchase, and the financier levies an interest cost of 6% per annum fixed for the entire financing tenor. The loan will be repaid on maturity of the financing facility or when the property is sold if it’s earlier. The annual interest cost is RM30,000Net Leveraged Rental Yield takes into account your property financing in calculating the rental yield. In this scenario, your capital cost is the difference of purchase price and your borrowing (ie, RM650,000 - RM500,000). (RM45,600 - RM5,400 - RM30,000)/RM150,000 x 100 = 6.80% per annum.
Capital Gain , on the other hand, is a one-time gain (or loss) when you sell your property. It is calculated by subtracting your original purchase price from the selling price.
Finding Caution: Do note the example above does not take into consideration taxation. You should consult your tax accountant to determine any potential tax liability deriving from such property investment. What to look for in an investment property – location, type, rental returns.A great investment property is one that meets your investment objectives such as your target rate of return, investment time horizon and any other criteria you might have. Main determinants of property value include:Location - this should be assessed with the target market in mind to determine whether there will be demand by the target market for this location. Also research the historical rate of property value appreciation in that particular location for similar properties.Property type and size dimension- residential and commercial properties each have their peculiarities, and dependent on the location, attracts different tenant profiles. Rental Returns - find out how much rent the property can fetch by researching the rental values of similar properties in the area, and ascertain the estimated costs to own and maintain such property.Cash flow - evaluate the property's potential to generate income as against cash outflows. Obvious preference is to have the investment property cash flow positive as soon as possible. 4* Total Return comprises net rental income and capital gain over the fiveyear investment horizon; computed using the internal rate of return formula Personal Fund(s) Leveraged Rental (Net) Yield per annum 6.18% 6.80% Total Return per annum* 11.11% 23.52% Following the same example above, if you were to sell the property 5 years later for RM850,000, the capital gain would be: RM850,000 - RM650,000 = RM200,000 one-time gain, or (RM850,000 - RM650,000)/RM650,000 x 100 = 30.77% over the original purchase priceTaking in to account the leverage (borrowing) effect, the Leveraged Capital Gain would be (RM850,000 - RM650,000)/RM150,000 x 100 = 133.33% over the initial capital The total return yield from an investment property is the rental yield plus the capital gain over the investment tenor.