Subsale Property in Malaysia: The Timeline from Offer to Vacant Possession

Why a subsale works differently from a developer purchase

When you buy from a licensed housing developer, the Housing Development (Control and Licensing) Act 1966 requires a statutory form of sale and purchase agreement, which fixes matters such as the payment schedule and the date for delivery of vacant possession. A subsale is a private sale between owners. There is no statutory form, so the deposit, the completion period, late interest and what happens if either side cannot complete all depend on the agreement the buyer and seller sign. That is why it pays to read the timeline clauses carefully before signing.

The stages below describe how a typical subsale of a home in Kuala Lumpur or Selangor runs. Every agreement is different, and the actual dates turn on its terms. For an overview of the work involved, see the firm's property and conveyancing page.

Stage 1: the offer and the earnest deposit

The buyer usually signs a letter of offer and pays an earnest deposit, commonly 2% to 3% of the purchase sum, often to the estate agent or the seller's lawyer as stakeholder. The letter of offer normally gives a short period, often about two weeks, for the formal agreement to be signed.

Before paying any deposit, it is sensible to see the result of an official search of the title at the land office. It shows the registered owner, whether a bank holds the title as security for a loan, any caveat lodged by someone else, and any restriction in interest that will require consent for the transfer.

Stage 2: searches and the sale and purchase agreement

Each side's lawyer checks the title and the parties. Usual checks include the official land search, a bankruptcy search against an individual seller at the Malaysia Department of Insolvency, and a winding-up search if the seller is a company. One lawyer prepares the agreement and the other reviews it.

On signing, the buyer usually pays the balance of the deposit, so that the total paid is commonly 10% of the purchase sum. Under the Stamp Act 1949, an instrument must be stamped within 30 days of signing. The sale and purchase agreement itself usually attracts only a fixed duty; the main stamp duty falls later on the memorandum of transfer.

Stage 3: consents that can affect the timeline

Restriction in interest. Under section 120 of the National Land Code, the State Authority may impose a restriction in interest when land is alienated, and the restriction is endorsed on the title. A common example is that the land cannot be transferred, leased or mortgaged without the consent of the State Authority. This is common on leasehold titles, but some freehold titles carry it too, so the wording on the title matters more than the label. In Selangor, consent applications to transfer have been handled fully online through the land office's e-Tanah system since 26 October 2024. Many agreements start the completion period only when this consent is received.

Foreign buyers. Under section 433B of the National Land Code, a buyer who is not a Malaysian citizen, or a foreign company, generally needs the prior approval of the State Authority to acquire a home. Each state sets its own conditions.

No individual or strata title yet. If the title has not been issued, the seller usually sells the rights under the original developer agreement by a deed of assignment. This often needs the developer's consent and, where the seller's loan is secured by an assignment to a bank, the bank's involvement as well.

Stage 4: the seller's real property gains tax filing

A subsale must be reported to the Inland Revenue Board (LHDN) under the Real Property Gains Tax Act 1976. The seller files Form CKHT 1A and the buyer files Form CKHT 2A, both within 60 days of the date of disposal, which is usually the date of the agreement. Different rules on the date can apply where the sale needs government or state approval. Since 1 January 2025 these returns must be filed online through e-CKHT on the MyTax portal.

Under section 21B of the Act, the buyer must retain part of the purchase money and pay it to LHDN within 60 days of the date of disposal. The amount is the lower of the whole of the money paid or a percentage of the total value: 3% where the seller is a Malaysian citizen or permanent resident; 7% where the seller is neither, or is a company not incorporated in Malaysia; and for a company incorporated in Malaysia, 5% if it sells within three years of acquiring the property and 3% after that. LHDN's guidance adds that, for disposals from year of assessment 2026, the buyer may instead remit an amount equal to the seller's self-assessed tax if the seller notifies the buyer of that amount before the payment is made. A buyer who does not pay on time faces a 10% increase on the unpaid amount. In practice, the agreement usually provides for the buyer's lawyer to hold this sum from the deposit and pay it on time.

The retained sum is an advance towards the seller's tax, not the tax itself. For a Malaysian citizen or permanent resident, the rate on the gain is 30% if the property is sold within three years of acquisition, 20% in the fourth year, 15% in the fifth year, and nil from the sixth year onwards. Under the self-assessment system that started for disposals from 1 January 2025, the seller works out the tax in the return and pays any balance within 90 days of the date of disposal.

Stage 5: loan documents and the memorandum of transfer

If the buyer is borrowing, the buyer's bank issues a letter of offer and the buyer signs the loan documents, which are also stamped. The transfer itself is made by a memorandum of transfer in Form 14A under section 215 of the National Land Code.

Stamp duty on the transfer is calculated on the purchase sum or the market value, whichever is greater, so LHDN may assess a higher value than the parties agreed. Since 1 January 2026 stamping is done through LHDN's e-Duti Setem service on the MyTax portal. LHDN has announced that transfers of real property that do not involve a valuation by the Valuation and Property Services Department (JPPH) move to self-assessment from 1 January 2027. You can estimate the duty with the stamp duty calculator.

Once the transfer is stamped, it is presented at the land office for registration, together with the buyer's bank's security documents if there is a loan. Under section 215(2) of the National Land Code, the title passes to the buyer only when the transfer is registered.

Stage 6: completion and vacant possession

The buyer pays the balance within the completion period, often three months from the date of the agreement or from the date the last consent is received, whichever is later. Many agreements allow a one-month extension if the buyer pays late interest at a rate stated in the agreement.

Where the seller still owes money to a bank, part of the balance is used to redeem that loan so that the bank releases its security over the title, and the rest is paid to the seller. Vacant possession and the keys are usually handed over once the full balance, and any late interest, has been paid. Agreements commonly also deal with quit rent, assessment and, for strata property, maintenance and sinking fund contributions up to the date of completion.

What commonly delays a subsale

• Waiting for state consent on a title with a restriction in interest, or for the developer's consent where there is no title yet.
• Conditions in the buyer's loan offer that take time to meet.
• Delay in getting the seller's loan redemption statement and the release of the title from the seller's bank.
• LHDN assessing a higher market value, so more stamp duty must be paid before the transfer can be presented.
• Something found on the title search, such as a caveat or a discrepancy in the owner's details.

If you plan to rent the property out after completion, see also landlord rights when tenants default on rent.

Where these rules come from

• National Land Code, sections 120 (restrictions in interest), 215 and Form 14A (transfer) and 433B (acquisition by non-citizens and foreign companies).
• Stamp Act 1949, and LHDN's guidance on e-Duti Setem and the stamp duty self-assessment system: hasil.gov.my.
• Real Property Gains Tax Act 1976, section 21B and Schedule 5, and LHDN's guidance on retention by the acquirer: hasil.gov.my.
• Selangor Land and Mines Office, consent to transfer: ptg.selangor.gov.my.
• Housing Development (Control and Licensing) Act 1966, for purchases from developers.

Common questions

How long does a subsale usually take in Kuala Lumpur or Selangor?

Many agreements set a completion period of three months, often with a one-month extension on payment of late interest. Titles that need state consent, or properties without an individual or strata title, usually take longer.

When does the completion period start?

It depends on the agreement. A common approach is that it runs from the date of the agreement or the date the last required consent is received, whichever is later. Check this clause before you sign.

Does the buyer have to hold back money for the seller's tax?

Yes, where money is paid. Under section 21B of the Real Property Gains Tax Act 1976, the buyer must retain part of the purchase money, commonly 3% for a Malaysian seller, and pay it to LHDN within 60 days of the date of disposal.

When does the buyer become the legal owner?

Under section 215 of the National Land Code, title passes when the memorandum of transfer in Form 14A is registered at the land office. Signing the agreement or paying the deposit does not by itself make the buyer the registered owner.

Is the process different if there is no individual or strata title yet?

Yes. The seller's rights under the original developer agreement are usually sold by a deed of assignment, often with the developer's consent. Once the title is issued, ownership is transferred by a memorandum of transfer.