#spaexplained

[commonsense-101]

SPA Contract

🏡 Thinking of Buying a House in Malaysia? Read This First.

So, you're about to buy your first home — exciting stuff! 🎉 But before you pop the confetti, there’s a key player in your property journey that deserves your full attention: the SPA.

What’s an SPA? It’s the Sale and Purchase Agreement, and it’s the holy grail of any property transaction. Whether you're buying a brand new condo or a sub-sale terrace house, this document outlines every crucial term between buyer and seller.

📜 The SPA covers things like:

Property details (duh)

Buyer & seller info

Payment schedule

Financing methods

Vacant possession (aka when you get your keys!)

Defect liability period

And even the house plan (yes, the actual measurements)

Your SPA is what legally binds the deal — once it’s signed, there’s no more “changing your mind” without consequences. Speaking of which…

🚨 Thinking of Backing Out? Read This First. If you're the buyer and decide to terminate the SPA, there’s usually a 10% penalty of the purchase price. Bought a home for RM500,000? That’s a RM50,000 mistake. And for sellers? Backing out isn’t really an option. Most SPAs come with a “specific performance clause,” meaning legal action will come knocking.

💸 Stamp Duty 101 Under the Stamp Duty Act 1949, you'll need to pay stamp duty — a kind of tax on your property transfer.

There are two types:

Fixed duty

Ad valorem duty (this one applies to most real estate)

Your duty is calculated by the Inland Revenue Board (IRB) after consulting the Valuation and Property Services Department.

BUT good news for first-time homebuyers: You may qualify for stamp duty exemptions under the Stamp Duty (Remission) (No. 2) Order 2016, IF:

You’re Malaysian 🇲🇾

Buying a residential property priced at RM500,000 or below

SPA is dated between January 1, 2017, to December 31, 2018

And this is your first ever home (not even an inherited one)

There are also exemptions for love-based transfers (think: parent → child), recognizing that sometimes, it’s more than just a transaction 💞

🔑 Vacant Possession — When Do You Get the Keys? This clause is EVERYTHING. You should get your keys:

Within 24 months (landed)

Within 36 months (strata, e.g., condos)

If your developer delays this? You’re entitled to LAD (Liquidated Ascertained Damages), usually 10% per year of the purchase price until you receive your keys.

🧾 Different SPAs for Different Properties? Yup.

Schedule G → Landed (terrace, semi-Ds)

Schedule H → Strata (condos, apartments)

Each has different terms because strata properties have shared areas (pools, parking, etc.) that need extra regulation.

💼 Who Drafts the SPA? How Much Does It Cost? Usually, the buyer’s lawyer prepares the SPA. And yep — the buyer pays for it.

💰 Legal fees? Expect to fork out 3–4% of the transaction value. Trust me, this is not the time to DIY. Your lawyer isn’t just writing up a doc — they’re safeguarding your rights and dealing with everyone (banks, sellers, agents, etc.).

📌 TL;DR: Buying a house is a big deal — emotionally, financially, and legally. Your SPA is your safety net. Understand it. Ask questions. And for heaven’s sake, get a good lawyer.

Because when things go south, that document is your only shield.

Happy house hunting! 🏠✨

Writer : Choo Huey San