Do you know you have to pay Legal Fees For Buying A House? And that’s not the only cost you will need to pay. Want to find out more about SPA Lawyer Fee? This is the article for you.

When buying a house in Malaysia, you will need to hire a lawyer to handle the Sale and Purchase Agreement. Sale and Purchase Agreement is a buy and sells agreement between a seller and a purchaser.

Sale and Purchase Agreement is a Legal document binding between two parties, The Seller and The Purchaser. It consists of important clauses and terms: property details, purchase price, seller details, purchaser details, delivery timeframe, payment method, vacant of possession, et cetera.

Most importantly, the Sale and Purchase Agreement is the only agreement that matters. Therefore, it is wise to appoint a SPA lawyer that well versed in drafting a detailed Sale and Purchase Agreement.

There will be a cost to prepare the Sale and Purchase Agreement, and a SPA lawyer will charge the cost.

The SPA lawyer fee quotation is including

  1. Professional Lawyer Fee
  2. Property Stamp Duty
  3. Disbursement Fee
  4. 6% Service Tax.

Most of the time, Property Stamp Duty always costs more than the other fees, even the Professional Lawyer Fee. That is why people will take advantage when there is a Stamp Duty Exemption.

HOW TO CALCULATE SPA LAWYER FEES?

Let’s take a look at how to calculate Legal Fees For Buying A House.

Firstly, you should know the Professional Lawyer Fee calculation is based on a scale fee. Check out the table below.

PROPERTY PURCHASE PRICE PERCENTAGE CHARGE
For the first RM500,000 1.00% (subject to a minimum fee of RM500.00)
For the next RM500,000 0.80%
For the next RM2,000,000 0.70%
For the next RM2,000,000 0.60%
For the next RM2,500,000 0.50%
Excess of RM7,500,000.00 shall not exceed 0.50%

Based on the above SPA Lawyer Fee scale, we will calculate the actual Professional Lawyer Fee.

Please refer to the two examples below.

Example 1.

For instance, Jenny bought a house. And the house cost about RM500,000. So, how much is the Professional Lawyer Fee?

The answer is RM5000.

The formula,

RM500,000 x 1% = RM5000.

Okay, that’s an easy one.

Example 2.

If Jenny bought a house and the house purchase price is RM1 million. How much is the Professional Lawyer Fee now?

The answer is RM9000.

The formula,

For the first RM500,000 x 1% = RM5000.

For the next RM500,000 x 0.8% = RM4000.

The total Professional Lawyer Fee is RM9000.

On top of the actual Professional Lawyer Fee, the Purchaser has to file a form called CKHT 2A. The CKHT 2A can be file by a lawyer or a Purchaser at the Inland Revenue Board Of Malaysia.

If the CKHT is to be filed by a lawyer, the lawyer will charge RM200 for each Purchaser. And if there are two Purchasers, the fee is RM200 x 2 = RM400.

However, if a Purchaser decides to save on RM200, he can take a trip to the nearest Inland Revenue Board Of Malaysia and do the filling himself. It might take 1-2 trips to the Inland Revenue Board Of Malaysia to complete the filling.

CKHT-2A form is to be file by a Purchaser. The form requires a Purchaser to file all the details on himself, seller, property details, purchase price, et cetera. It’s a record to be kept by the Inland Revenue Board Of Malaysia.

In the future, if the property is sold to another party, this record will be used to calculate the Real Property Gain Tax (RPGT).

PROPERTY STAMP DUTY

If you are buying a house in Malaysia, regardless you are a Malaysian or Foreigner, everyone requires paying a Property Stamp Duty.

Property stamp duty stands a substantial amount in the SPA lawyer fee quotation, and it is also based on the following scale rates.

Property Purchase Price or Market Value, whichever is higher Rate Charge
For the first RM100,000 1%
For the next RM400,000 2%
For the next RM500,001 to RM1 million 3%
The subsequent amount 4%

Based on the Property Stamp Duty table above, we can calculate the Property Stamp Duty. Refer to the two examples below.

Example 1:

For instance, Jenny bought a house. And the house cost about RM500,000. So, how much is the Property Stamp Duty?

The formula,

RM100,000 x 1% = RM1000.

RM400,000 x 2% = RM8000.

Total Property Stamp Duty is RM9000.

Example 2:

If Jenny bought a house and the house purchase price is RM1 million. How much is the Property Stamp Duty now?

The formula,

RM100,000 x 1% = RM1000.

RM400,000 x 2% = RM8000.

RM500,000 x 3% = RM15,000.

Total Property Stamp Duty is RM24,000.

legal fees malaysia 2020

Property Stamp Duty

DISBURSEMENT FEE

When preparing for a Sale and Purchase Agreement, there will be some other small fees involved like, affirmation fee, adjudication fee, winding up and bankruptcy search, traveling and courier services, photocopy, printing, faxing, registration fees, title search, stamping on SPA, Stamping on Statutory Declaration, et cetera.

All these small fees are lump to one and called Disbursement Fee.

Generally, the disbursement fee’s total charge will be in the range of RM1200 -RM1500 or the most RM2000. Its mostly depending on the State Registration Fees. The state registration fee can cost from as low as RM100 to as high as RM1500, depending on property price and location.

6% SERVICE TAX

The Service Tax is imposed on specific prescribed services provided by a taxable person in the course or furtherance of Malaysia’s business. The current service tax in Malaysia is 6%.

The service tax 6% is also part of the Legal fees of buying a house.

A lawyer charged a 6% Service Tax to the client. The portion being charged is on the Professional Lawyer Fee and Filling of CKHT-2A, if any.

For example, If the Professional Lawyer Fee is RM5000, the Filling of CKHT-2A is RM200, the total fees charged are RM5200.

The Service Tax is RM5200 x 6% = RM312.

So that concludes all the fees in the Sale and Purchase Agreement Lawyer Fee.

Here we have one example with all the SPA Lawyer Fees come together.

Example:

Jenny bought a house. And the house cost about RM500,000.

A. Professional Lawyer Fee: RM5200

Formula,

RM500,000 x 1% = RM5000

CKHT-2A RM200 x 1 person = RM200

B. Property Stamp Duty: RM9000

Formula,

RM100,000 x 1% = RM1000

RM400,000 x 2% = RM8000

Total RM9000

C. Disbursement Fees: RM1284

D. 6% Service Tax : RM5200 x 6% = RM312

TOTAL COST OF SPA LAWYER FEE: RM15,796.00

Sample of SPA Lawyer Fees quotation.

spa lawyer fees quotation

SPA Lawyer Fee

If you guys are interested in getting an accurate SPA quotation without calculating, send the SPA Lawyer Fee Quote Request HERE.

Or fill-up the form below, and we will send you the SPA Lawyer Fee Quote to your WhatsApp or email.

In case you’re wondering about the legal fee for the Loan Agreement, you can check the article here – LEGAL FEE FOR LOAN AGREEMENT.

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