Planning to buy or sell a factory, land, or commercial property in Malaysia? This blog explains the key stamp duty and legal fees involved — and how to reduce transaction costs.
Stamp Duty and Legal Costs for Industrial & Commercial Property Explained
When investing in industrial or commercial real estate — whether it’s a factory, land parcel, or shop lot — it’s crucial to understand the transaction costs beyond just the property price. Stamp duty and legal fees can add up quickly if you're not prepared. This guide breaks down the standard charges in Malaysia and how investors can legally save during the transaction process.
1. What Is Stamp Duty?
Stamp duty is a government-imposed tax on legal documents, particularly the Sale & Purchase Agreement (SPA) and loan agreement. It applies to all property transactions, including industrial and commercial assets.
Stamp Duty on Transfer of Property (2025)
| Property Value (RM) | Rate |
|---|---|
| First RM100,000 | 1% |
| Next RM400,000 | 2% |
| Next RM500,000 | 3% |
| Amount exceeding RM1 million | 4% |
Example: For a factory priced at RM2 million, total stamp duty = approx. RM66,000
Stamp Duty on Loan Agreement
- Fixed at 0.5% of the loan amount
- Charged if you’re financing the purchase via bank loan
2. Legal Fees for SPA & Loan Agreement
Lawyers play a key role in ensuring title transfer, due diligence, and loan documentation. Their fees are standardized under the Solicitors’ Remuneration Order (SRO).
Legal Fees on Sale & Purchase Agreement
| Property Value (RM) | Legal Fee Rate |
|---|---|
| First RM500,000 | 1.0% |
| Next RM500,000 | 0.8% |
| Next RM2 million | 0.7% |
| Next RM2 million | 0.6% |
| Exceeding RM7.5 million | Negotiable (=0.5%) |
Legal Fees on Loan Agreement
- Same rate applies based on loan value
- Subject to 6% SST + disbursement costs (search fees, registration, etc.)
3. How to Save on Transaction Costs
- Negotiate professional fees (where permitted) for high-value assets
- Check for exemptions: Some SMEs may be eligible for stamp duty relief under government schemes
- Buy under a company structure for better tax efficiency and claimable expenses
- Bundle legal work for multiple properties to get bulk discounts
4. Common Additional Costs
- Valuation fee (for bank loan)
- Real estate agent’s fee (typically 2%–3%)
- Land title search fees
- Quit rent and assessment clearing
Conclusion
Being aware of the full cost structure helps you plan your budget accurately and avoid last-minute surprises. Whether you’re buying a factory, warehouse, or commercial lot, understanding stamp duties and legal fees is a smart first step toward a profitable transaction.
