The mere thought about finally owning your first property may give you that adrenaline rush and ‘butterflies-in-your-tummy’ feeling!
But at the same time, making sense of all the property jargons can also give you that same ‘weird feeling in your tummy’ sensation. Some people just refer to that feeling of ‘confusion’. Like…What is SPA – and all the terms and conditions included in it?! *Gulp*
Indeed, learning about property jargons is like learning how to read ABC from scratch! It may well be a different language altogether! As excited as we are about everything that is related to the property industry, we must agree that property jargons are not the easiest thing to understand.
So, we will try to help explain (in simple English) some of the most common property jargons in a 3-article series of ‘Must-know Property Jargons in Malaysia’. Hopefully by the end of this series, you’ll be more familiar with these jargons enough to at least understand what they mean!
Let’s Understand 6 of the Most Common Must-know Property Jargons in Malaysia
Certificate of Completion and Compliance (CCC)
A CCC is a document that issued by local authorities when a newly-built property is assessed and approved as complete and fit for property owners to stay in.
It basically means, the property is now officially completed in compliance with the required standards, and is endorsed by a registered member of the Board of Architects Malaysia.
Freehold
A freehold property is a land or property that is owned by the buyer indefinitely. Which means that the land and the property enclosed on it are yours to own forever.
Though in certain circumstances, the state can still take back the freehold land if it is deemed to use for public purposes such as building highways. In such cases, compensation is usually given to the land or property owners, in the form of cash or discounted property rates.
Leasehold
The debate on ‘freehold vs leasehold’ will never end… Now we know that freehold lands or properties belongs to the buyer forever, how about leasehold?
Leasehold land or property belongs to the state authority and is leased to the buyer for not more than 99 years. Once the lease period is up or expired, the land is then reverted back to the state authority. Owners can apply for a lease renewal, and the cost differs from state to state.
Memorandum of Transfer (MOT)
A MOT is an official document that is used to transfer ownership of a property from seller or developer to buyer, and needs to be submitted to the Land Office, in order to complete the ownership transfer.
The cost of MOT is borne by the buyer, and usually includes professional legal fees, stamp duty, disbursement fees as well as sales and service taxes.
Assessment Tax / ‘Cukai Pintu’
This is a form of tax that homeowners have to pay to their respective local councils twice a year, for the maintenance cost of the city. This includes service such as waste transportation, city landscaping, street lights fees, for example.
So every time you see a street light on along your street or in your city, do not take it for granted! Take pride that you contributed to its maintenance for the greater good of everyone using it!
Quit Rent / ‘Cukai Tanah’
Another tax that landowners are required to pay is the quit rent or ‘cukai tanah’. The National Land Code makes it compulsory that all landowners pay quit rent to their relevant Land Office.
Unlike cukai pintu that is paid twice a year, usually by 28th February and 31st August, landowners are required to pay cukai tanah once a year by every 1st January.
So You Think You Know The Property Jargons in Malaysia?
Phew, that was not so bad, wasn’t it? Not as tough to understand as you initially thought!
Now that we have warmed ourselves up to the 5 most common property jargons in this article, you are one step closer to buying a new home in Malaysia, by following this ultimate step-by-step guide!
While we are on the topic, it may be useful to read about the pros and cons of properties under-construction and completed properties, if you are in a dilemma about which to go for!
Ultimately, you do not have to be an expert in property jargons; the least you need to know are the basic concept and meanings, so you do not end up on the short end of any property dealings!
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This article is intended to convey general information only. It does not constitute advice for your specific needs. This article cannot disclose all of the risks and other factors necessary to evaluate a particular situation.
Any interested party should study each situation carefully. You should seek and obtain independent professional advice for your specific needs and situation.