Selling a home can be a headache – but it is a good problem to have. However, before you start counting the money you will make from the sale, there are a few hidden costs in selling your property.
Aside from considering whether to make repairs and renovations to the home before selling it, you should also consider the cost of selling that property.
You can’t sell a property on your own. You will need to engage professionals – and that will cost money.
(1) Agent professional fee
Perhaps the most important people to engage when putting your home up for sale are real estate agents.
A real estate agent will help you price and market your property, arrange for viewing and bookings, and negotiate with prospective buyers on your behalf. In return, they earn a professional fee of typically 2% – 3% of the property’s selling price, which is subject to 6% service tax.
(2) Legal fees
Once you have found a buyer, next comes the legal matters which will require the expertise of a lawyer. When you and the buyer have come to an agreement, the buyer will pay you a non-refundable deposit (also known as earnest deposit or booking fees) amounting to 2% of the property’s selling price.
This is when a lawyer comes into the picture. The lawyer will be tasked with drafting the Letter of Offer and then the Sale and Purchase Agreement (SAP Agreement).
http://1-million-dollar-blog.com/calculators/legal-fees-and-stamp-duty-calculator/
Note:
For new projects, most developers will waive or give FREE Legal Fees & Stamp Duty on SPA &/or LOAN Agreements to its buyers.
For sub sale properties, the buyers will have to pay the Legal Fees & Stamp Duty on these legal agreements.
For property price exceeding RM7.5 million, Legal Fees of the excess RM7.5 million is negotiable but subjected to maximum of 0.4%.
(3) Real Property Gains Tax (RPGT)
This is where the bulk of the cost. Real Property Gains Tax (RPGT) is a tax imposed by the government when you dispose of a property within five years from the date of purchase. With that said, RPGT is not applicable if you have held the property six years or more.
RPGT is charged only on net gains, meaning the sum after deducting the original purchase price of the property, cost of renovations done to the property, and other costs such as legal cost. In other words the net gain you made from the sale.
With effect from Budget 2014, RPGT rates have increased to curb the activity of local and foreign property flippers.
However, RPGT can be exempted for one unit of residential property per Malaysian citizen or permanent resident, or if the disposal of property is between parent and child, husband and wife, and grandparents and grandchildren.
Source: iMoney Research Team
