Property Investment 101: Be ready to pay higher legal fee when we buy a property
It’s never just the first 10 percent of the home price
If we intend to buy a property, we need to save some money every day, every week, every month and probably for a few years. While the aim is the first 10 percent downpayment, that is actually not enough. There are stamp duty to be paid (click here to read) and there is also the legal fees to be paid. Here’s a bad news for property buyers. The legal fee is increasing and it has already started to be in effect starting 15th July 2023. How much is the increase? There’s a nice infographic in Article in thestar.com.my
Within the same Article in thestar.com.my, The last increase was way back in 2017. Senior lawyer Datuk Roger Tan said, “The increase in costs has been made particularly acute by the Covid-19 pandemic and its impact on the economy. Lawyers’ operating costs have also risen significantly in the last few years.” He added, “One does not ask for a discount when one consults a doctor. Here, the lawyer’s job is to protect and uphold your legal rights to your property as a vendor, purchaser, borrower, landlord and tenant.”
Malaysian Bar president Karen Cheah said there is a need to increase the scale and fixed fees chargeable to ensure lawyers are able to cope with the current financial situation.“
Property transactions from licensed housing developers will automatically get up to a 50% reduction in fees, depending on the value.
Senior lawyer Datuk Roger Tan said, “The sale and transfer of property valued at RM500,000 and below will now be subject to a conveyancing fee of 1.25% (previously 1%). For properties valued between RM500,000 and RM7.5mil, the conveyancing fee is now 1%.” Do read the article in full here: Article in thestar.com.my,
Inflation will always happen and this time the legal fees are up
It’s a chicken and egg situation really. That bowl of noodle which used to be RM5 is now RM8. The glass of teh tarik which used to be RM1.50 is now RM2.50 if not higher. Well, when the cost of food increases, the salary would have to increase in order for the same person to be able to afford the same bowl of noodle and the same glass of teh tarik. Alternatively just eat at a cheaper noodle shop and drink air suam lah. With employers having to pay higher salaries, the cost of everything else will start to increase too.
Cost of materials will also increase and for property, let’s do not wish that the property developer will cut cost when constructing the property yeah. Just yesterday evening, I had teh tarik with a good friend who told me that buying a property for the children will become compulsory. Even he felt that the property price will keep rising. I told him that it’s at least still possible to buy in some less popular areas. By the way, when the prices rise, it will rise for all areas yeah. Only whether it’s faster or it’s slower than the usual average.
It’s not possible to stop more potential price increases though. Just need to keep pushing and doing more and thus earning more. It’s a race and we better continue walking faster.
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