The Cost of Renting in Malaysia: A Breakdown of Rental Fees
In rental of house in Malaysia, it does not end on the basic aspects like kind of house to be rented and the amount of rent to be charged per month among other features. It’s essential to account for other charges, including deposits, legal fees, and the rental agreement stamping fee, which ensures your tenancy agreement is legally binding. This guide looks at these costs in full detail so that you can be in a position to plan for your budget and avoid incidences of emergent costs.
Key Rental fees in Malaysia
Many costs associated with purchasing a property in Malaysia may be paid once only or at regular intervals. This way, you’ll learn about these charges and, therefore, make informed decisions.
Monthly Rent
The first cost that any tenant knows is his/her monthly rent, which depends on the following factors: location, type of property, and amenities. For example, a studio apartment in central Kuala Lumpur may cost RM 1,200 to RM 2,500, while a two-bedroom unit in the suburbs might range from RM 1,000 to RM 1,800. Larger properties, like landed houses in gated communities, can cost between RM 3,000 and RM 6,000.
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Security Deposit
The security deposit, usually equal to two months’ rent, is refundable at the end of your lease, provided there’s no damage to the property or outstanding bills. For a monthly rent of RM 2,000, you’ll need to pay RM 4,000 upfront as a security deposit.
Utility Deposit
This deposit covers unpaid utility bills and is typically equivalent to half a month’s rent. For a rent of RM 2,000, the utility deposit would be RM 1,000.
Rental Agreement Stamping Fee
The rental agreement stamping fee is a government tax that validates the tenancy agreement. It’s a critical cost because an unstamped agreement isn’t legally enforceable.
To calculate the stamping fee, multiply the annual rent minus RM 2,400 by 0.004. For instance, if your monthly rent is RM 2,500, the annual rent would be RM 30,000. Subtract RM 2,400, leaving RM 27,600. Multiply by 0.004, resulting in a stamping fee of RM 110.40. Tenants are generally responsible for this fee unless otherwise negotiated.
Legal Fees for Drafting the Agreement
Landlords often engage lawyers or agents to draft tenancy agreements. Legal fees are usually shared between landlords and tenants. The cost depends on the annual rental amount. For the first RM 10,000 of annual rent, the fee is 25% of one month’s rent. The next RM 90,000 is 20% of one month’s rent. If your monthly rent is RM 2,000, expect legal fees of approximately RM 500 to RM 600.
Maintenance and Service Charges
If you are occupying a condominium or a serviced apartment, you may need to pay charges catering to the Segment’s maintenance services. Though normally the landlord incurs these costs it is not exceptional for the lease to provide for the tenant’s contribution which can be between RM 100 to RM 300 per month.
Other Potential Costs
In addition to the above, tenants may incur extra costs depending on the property and lease terms.
Furnishing Costs
Unfurnished properties are common, so you may need to budget for furniture and appliances.
Parking Fees
Some properties charge separately for parking spaces, with monthly fees ranging from RM 50 to RM 200.
Utilities and Internet
The tenant caters to utilities such as electricity, water, and internet. A household uses between RM 100 and RM 250 for its electricity bills monthly, water bills between RM 20 and RM 50, and internet subscription between RM 100 and RM 150.
Budgeting for Rental: Malaysia
Don’t spend more than thirty percent of your income on rent to sustain the cost of spending a considerable amount on rent. For instance, if your monthly rent is RM 2,000, prepare to pay RM 7,610 upfront, which includes the security deposit (RM 4,000), utility deposit (RM 1,000), legal fees (RM 500), and stamping fee (approximately RM 110). Be sure to account for these one-time charges and recurring monthly costs.
FAQs
What is a rental agreement stamping fee?
The stamping fee is a government tax required to legalize tenancy agreements in Malaysia, ensuring they’re enforceable by law.
Who pays the rental agreement stamping fee?
Tenants typically pay the stamping fee, which can be negotiated with the landlord.
How is the stamping fee calculated?
Subtract RM 2,400 from the annual rent and multiply the result by 0.004 to get the stamping fee.
Are legal fees for drafting the tenancy agreement mandatory?
Yes, landlords often engage professionals to draft tenancy agreements, and the cost is usually shared between the landlord and tenant.
Is the security deposit refundable?
The security deposit is refundable at the end of the lease if there is no damage to the property and all bills have been paid.
What happens if the tenancy agreement is not stamped?
If the agreement isn’t stamped, it cannot be used as evidence in court, making it difficult to resolve disputes.
Conclusion
Unlike in other countries a person needs to understand that renting a property in Malaysia or a house in particular, is not all about taking the monthly amount to pay for the rental and nothing more. Understanding the various charges, including the rental agreement stamping fee, legal fees, and deposits, is crucial for budgeting effectively and avoiding unexpected costs. When you prepare for the renting market, you will understand the market and avoid any hitches in the process making your renting process smooth.
Whether you’re a first-time tenant or an experienced renter, staying informed about rental costs in Malaysia will help you make better financial decisions and enjoy a hassle-free tenancy.
