5 Things To Know About Cost of Legal Fees When Buying A Property

Interested in buying a property for the first time? Unsure of how legal fees work in regards to property purchase? Or are you just curious about the cost of legal fees when buying a property? Whatever your reasons may be, this article will be useful for your reference before you make your purchase.

Here are the five essential things you need to know about the cost of legal fees when buying a property:

1.       The calculation of legal fee for a standard Sale and Purchase Agreement (SPA) can be found in the Solicitors’ Remuneration Order 2005 (SRO). The scale fees are as follow:

Consideration or Adjudicated Value

Scale of Fees

First RM 150,000

1.0% (subject to a min. fee of RM 300)

Next RM 850,000


Next RM 2,000,000


Next RM 2,000,000


Next RM 2,500,000


In excess of RM7,500,000

Negotiable (max 0.4%)

2.       In addition to the above, there are several items which are listed under “disbursements” and they include stamp duty on the documents, search fees for Land Office for example, registration fees as well as other miscellaneous fees. It is worth noting that the amount payable for stamp duty for each SPA is RM 10. SRO also allows solicitors to charge an additional of RM 50 for miscellaneous expenses which need not be itemized.

3.       So what happens when documents are not stamped within the timeframe? In situations like this, the purchaser has to pay a penalty on top of the stamp duty. The rates are listed in the table below:

Stamped within 3 months:

RM 25 or 5% of the duty (whichever shall be greater)

Stamped later than 3 months but not later than 6months

RM 50 or 10% of the duty (whichever shall be greater)

Stamped later than 6 months

RM 100 or 20% of the duty (whichever shall be greater)

The good news is that the purchaser may appeal for a reduction of penalty to the Collector of Stamp Duties.

4.       As seen from the first table above, it is of utmost importance that the costs of legal fee should be strictly complied. In other words, solicitors are not permitted to give discount on legal fees, as stated in Rule 6 of the SRO. Failure to comply with such restrictions will result in disciplinary actions. 

5.    Buying a property is definitely not cheap with all the hidden costs. However, do not lose hope as you may consider buying a property with free SPA and loan facility agreements. This will help to save up on the legal fees and it is also said that there are currently many property projects which absorb the legal fees for home buyers.

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