Real Estate Commission Rates In Malaysia

Discover the official Real Estate Commission Rates in Malaysia for 2026. A complete guide on property agent fees, REN charges, and BOVAEP rules for buyers and sellers.

Property Selling Price (RM)

Transacted value

Tenancy Duration

Years

Commission Rate (%)

SST Rate (Service Tax)

Govt Tax on Fees (Standard 8%)

Agent/Negotiator Split

Percentage of comm. to agent

Total Fees + SST

RM 25,920.00

Effective: 3.24%

Net Proceeds

RM 774,080.00

To Owner (Before Legal Fees)

Distribution Breakdown

Visualizing the split between Owner, Negotiator, Agency, and Government (SST).

Professional Fee Breakdown

Description	Amount (RM)

Scenario Analysis

Negotiator Income: At 70% split, the agent earns RM 0.00.
Agency Revenue: The agency retains RM 0.00 to cover overheads and listing costs.
Note: 3% is the standard regulatory cap for residential sales in Malaysia.

Navigating the property market can be complex, and one of the most critical financial components for any transaction is understanding the Real Estate Commission Rates in Malaysia. Whether you are a homeowner looking to sell your bungalow in Damansara or an investor eyeing a condo in Penang, knowing exactly how much you need to pay your estate agent is vital for calculating your final net proceeds.

In Malaysia, professional fees are not arbitrary; they are regulated to ensure fairness and transparency. However, confusion often arises regarding who pays the commission, the difference between a Real Estate Negotiator (REN) and a Registered Estate Agent (REA), and how the Sales and Service Tax (SST) impacts the final bill.

This guide provides a comprehensive outlook for 2026, breaking down the property agent commission Malaysia structure, legal caps, and the role of the regulatory body. By understanding these rates, you can negotiate effectively, budget accurately, and ensure you are engaging with licensed professionals who adhere to Malaysian laws.

How Commission Rates Work in Malaysia

To understand Malaysia real estate commission rates, one must first understand the regulatory framework. Unlike some countries where fees are purely market-driven, Malaysia’s real estate profession is strictly governed by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP), also known as LPPEH.

The Role of BOVAEP

BOVAEP sets the standards for professional fees under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981. They determine the maximum allowable fees that registered firms can charge. This regulation protects the public from price gouging while ensuring agents are compensated fairly for their work, which includes marketing, viewing, negotiation, and handling the intricate booking processes.

Agent vs. REN vs. Firm

It is a common misconception that you pay the agent directly. In Malaysia, all professional fees must be paid to the Real Estate Agency’s client account, not the individual agent’s personal savings account.

REA (Registered Estate Agent): Fully licensed, can open an agency.
REN (Real Estate Negotiator): Works under the supervision of an REA. They carry a red tag ID.
The Firm: The legal entity that invoices you. The REN commission Malaysia structure is actually a split; the firm receives the full commission and then shares a percentage (e.g., 60% or 70%) with the REN.

Who Pays the Fee?

In standard Malaysian subsale transactions, the seller typically pays the agency fee. However, Malaysia buyer agent commission scenarios do exist, particularly if a buyer engages an agent specifically to hunt for property on their behalf. Dual agency (collecting fees from both buyer and seller for the same transaction) is heavily restricted and generally unethical unless fully disclosed and agreed upon, which is rare in residential deals.

Malaysia Real Estate Commission Standards (2026)

The Real Estate Commission Rates in Malaysia are subject to maximum caps defined in the Seventh Schedule of the Valuers, Appraisers, Estate Agents and Property Managers Rules.

1. Sale of Land and Buildings (Maximum 3%)

For the sale of residential houses, condominiums, commercial shops, and factories, the standard regulated maximum fee is 3% of the transaction price.

Maximum: 3.00%
Minimum: There is usually a minimum fee of RM1,000 per property, regardless of how low the price is.
Negotiability: While the cap is 3%, the property agent commission Malaysia is often negotiable. In competitive markets, agents might agree to lower rates (e.g., 2% or 2.5%), depending on the property’s saleability and price point.

2. Chattels, Plant, and Machinery (Up to 10%)

While standard real estate is capped at 3%, transactions involving chattels, plant, and machinery—often sold alongside industrial land or commercial businesses—can attract a fee of up to 10%. This distinction is important for business owners selling factories where the sale includes heavy machinery or specific business assets separate from the land title.

3. Rental Commission Guidelines

For tenancy agreements, the fees are generally calculated based on the tenancy duration:

Up to 3 Years: 1.25 months’ gross rental.
> 3 Years to 4 Years: 1.5 months’ gross rental.
> 4 Years to 5 Years: 1.75 months’ gross rental.
> 5 Years: 1.75 months’ gross rental + 0.25 months for every additional year.
Market Practice: Commonly, for a standard 1-year tenancy, the fee is 1 month’s rent. For 2 years or more, it is often 1.25 to 1.5 months, but this varies by agency and location.

4. Sales and Service Tax (SST)

It is crucial to note that Malaysia real estate fee percentage quotes usually exclude tax. As of the latest updates, professional services are subject to 8% SST (increased from 6%). This is payable by the client (seller/landlord) on top of the commission.

5. Additional Costs

Agents are also entitled to claim disbursements for marketing costs (e.g., signboard permits, portal listings like PropertyGuru/iProperty), provided these are pre-agreed with the client.

Example Commission Calculations

To visualize exactly how much you will pay, let’s look at two distinct scenarios using the Real Estate Commission Rates in Malaysia.

Example 1: Landed Property Sale in Selangor

Scenario: Mr. Tan is selling a double-storey terrace house in Puchong, Selangor.
Transaction Price: RM 600,000.
Agreed Commission Rate: 3% (Standard Maximum).

The Calculation:

Professional Fee: RM 600,000 × 3% = RM 18,000.
SST (8%): RM 18,000 × 8% = RM 1,440.
Total Payable to Agency: RM 18,000 + RM 1,440 = RM 19,440.

Note: From this RM 18,000, the agency might keep 30% (RM 5,400) and pay the REN 70% (RM 12,600) as their income.

Example 2: Luxury Condo Sale in Kuala Lumpur

Scenario: Puan Sarah is selling a luxury condominium unit in Mont Kiara.
Transaction Price: RM 1,200,000.
Agreed Commission Rate: 2% (Negotiated due to high value).

The Calculation:

Professional Fee: RM 1,200,000 × 2% = RM 24,000.
SST (8%): RM 24,000 × 8% = RM 1,920.
Total Payable to Agency: RM 24,000 + RM 1,920 = RM 25,920.

In this scenario, by negotiating the Malaysia real estate commission rates down to 2%, the seller saved RM 12,000 in fees compared to the standard 3% rate, though the SST payable also decreased accordingly.

Factors That Influence Commission in Malaysia

While BOVAEP sets the ceiling, several factors influence the actual Malaysia real estate negotiator fee charged on the ground.

Property Value and Volume: High-value transactions (e.g., RM 3 Million+) often see more room for negotiation. Owners of luxury estates or developers selling bulk units can often secure lower Malaysia real estate fee percentage tiers.
Location (Klang Valley vs. Others): In highly competitive hubs like Kuala Lumpur and Penang, agents are competing for listings, which can drive fees down to 2% or 2.5%. In rural areas or specialized markets in Sabah and Sarawak where finding a buyer is harder, agents may strictly adhere to the 3% max to cover their time and fuel costs.
New Launch vs. Subsale:
- Subsale: Standard 2-3% paid by the seller.
- New Projects: Developers often pay agents a higher package (sometimes 3% to 5%) from their marketing budget. Buyers of new launches generally do not pay agency fees.
Exclusivity: Granting an agent an “Exclusive Authorization” (sole right to sell) typically motivates them to put in more effort and marketing spend. In exchange, the owner might agree to the full 3% rate rather than squeezing the agent on fees.

When Sellers & Buyers Use Commission Calculators in Malaysia

Using a property commission calculator Malaysia tool is becoming standard practice for savvy property participants.

For Sellers: The primary use is to calculate Net Proceeds. Before setting a listing price, a seller needs to deduct the outstanding loan, Real Property Gains Tax (RPGT), legal fees, and the agent’s commission to see the actual cash in hand.
For Buyers: While buyers rarely pay commission in residential deals, understanding the Malaysia buyer agent commission is vital if engaging a dedicated property hunter for commercial spaces or land.
For RENs: Negotiators use these calculators daily to estimate their “Take Home Pay.” Since they don’t keep the full fee, they need to calculate the Gross Commission, deduct the firm’s override (e.g., 30%), and set aside tax to know their actual income.
For Investors: When flipping auction properties, investors must factor in the selling agent fees for the eventual exit strategy to ensure the flip remains profitable.

Common Mistakes & Malaysia-Specific Legal Notes

Dealing with property agent charges Malaysia requires due diligence. Avoid these common pitfalls:

1. Using Illegal Brokers

It is illegal for an unregistered individual to act as a property agent. Only REAs and RENs with valid tags issued by BOVAEP can collect fees. Illegal brokers often demand cash payments or higher rates but offer no legal protection if the deal goes sour.

2. Paying to Personal Accounts

Never transfer commission fees to a REN’s personal bank account. Malaysian law dictates that all professional fees must be deposited into the registered Estate Agency’s Client Account.

3. Misunderstanding the “Maximum”

Some sellers believe 3% is fixed. It is a maximum cap. You are legally allowed to negotiate, though agents are equally allowed to decline listing the property if the fee is too low to sustain their marketing costs.

4. Confusing SST with Admin Fees

The 8% SST is a government tax. It is not an “admin fee” kept by the agency. Ensure the tax invoice clearly separates the professional fee and the SST amount.

FAQs – Real Estate Commission Rates In Malaysia

Can an agent “markup” the price (e.g., sell at RM550k when I asked for RM500k) and keep the difference?

No, this is absolutely illegal in Malaysia. This practice, known as “net listing,” is prohibited by BOVAEP standards. Agents must charge a percentage fee (e.g., 3%) on the final transacted price. Any surplus amount from a higher sale price belongs to the seller, not the agent.

If the buyer pulls out and forfeits the booking fee, who keeps the money?

Under standard Malaysian agency practice, the forfeited earnest deposit is typically shared 50/50 between the property owner and the real estate agency, subject to a cap (usually the agency’s share cannot exceed the agreed full commission amount).

I signed an “Exclusive Authorization” but found the buyer myself. Do I still pay commission?

Yes. An “Exclusive” appointment grants the agency the sole right to sell the property for a specific period. Even if you (the owner) find the buyer during this validity period, the appointed agency is legally entitled to their full professional fee.

When exactly is the commission payable? Upon signing SPA or full payment?

Legally, professional fees are due once the agent has performed the “reasonable act” of finding a ready, willing, and able buyer who signs the Sale and Purchase Agreement (SPA). However, in practice, many owners negotiate to pay 50% upon SPA signing and the remaining 50% upon completion (full disbursement of funds).

Can I appoint multiple agents to sell my house?

Yes, this is called a “General Authorization” or Ad-Hoc basis. You can appoint 10 agents if you wish, and you only pay the one who successfully closes the deal. However, agents are often less motivated to spend money marketing “General” listings compared to “Exclusive” ones.

Does the 3% commission include marketing costs?

Generally, yes. The standard fee covers the agent’s time, basic marketing (PropertyGuru/iProperty listings), and fuel. However, for large-scale marketing campaigns (e.g., full-page newspaper ads or specialized events), the agency may request a separate marketing budget, which must be agreed upon in writing.

Can I bypass the agent to deal directly with the owner to save fees?

If the owner has an Exclusive appointment, bypassing is futile as they still owe the fee. If it is a General appointment, bypassing the agent after they introduced you to the property is considered unethical and can lead to legal claims by the agency for “effective cause” of the sale.

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