Property Agent Commission Malaysia: Rates, Rules, and When to Skip

Property agents in Malaysia charge 1-3% commission. That part most people know. But who pays, when, and whether you even need one — those answers depend on the transaction type. A 3% commission on a RM 800,000 property is RM 24,000. That is not a rounding error. It is worth understanding exactly how this works before you sign anything.

Here is the part that surprises most buyers: if you are buying a subsale property, you typically pay zero commission. The seller pays the agent. If you are buying a new launch from a developer, you also pay zero — the developer pays. The only time you as a buyer pay agent commission is if you specifically engaged a buyer's agent (rare in Malaysia) or if you are renting.

Standard Commission Rates

Commission rates in Malaysia are governed by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEA) under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242). The key rule: maximum commission is 3% of the transaction price for sale transactions. This is a ceiling, not a fixed rate.

Sale and Purchase (Subsale)

Who pays: The seller pays the agent's commission. It is deducted from the sale proceeds. As a buyer, you pay nothing to the agent in a standard subsale transaction.

When it is paid: At completion of the transaction — typically when the sale proceeds are disbursed. The agent does not get paid until the deal closes.

New Launch (Developer Projects)

Developers pay agents handsomely to bring in buyers. This is why agents push new launches aggressively — the commission is higher and the developer handles all paperwork. As a buyer, you pay nothing extra for using an agent to buy a new launch. The price is the same whether you walk into the showroom yourself or an agent brings you.

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Rental

Rental commissions are structured differently and both parties typically pay.

The formula: Typically 25% of the annual rent, split between tenant and landlord side agents. For a RM 2,000/month rental on a 2-year lease: total commission is RM 4,000 (RM 2,000 from tenant, RM 2,000 from landlord).

If the same agent represents both parties (common in Malaysia), they collect from both sides.

Negotiating Commission

Commission rates are not set in stone. The maximum 3% is a legal ceiling, not a minimum. Here is what is negotiable and what is not.

What you can negotiate (as a seller):

• Rate reduction from 3% to 2% or even 1.5% for high-value properties
• Flat fee instead of percentage (e.g., RM 15,000 flat for any property above RM 1M)
• Performance bonuses: lower base rate + bonus if sold above a certain price
• Exclusive vs open listing: exclusive listings sometimes warrant a higher rate because the agent invests more in marketing

What you cannot change:

• The maximum 3% cap for sales — even if an agent tries to charge more, it is illegal
• The requirement that the agent must hold a valid REN or REA registration

Negotiation leverage:

For properties above RM 2 million, it is reasonable to negotiate 1.5-2%. The agent makes RM 30,000-40,000 on a single transaction — that is already a strong payday. Do not feel guilty about negotiating. Agents expect it.

REN vs REA: Know the Difference

This distinction matters because dealing with an unregistered agent is illegal and offers you no protection if things go wrong.

How to verify: Go to the BOVAEA website and use the public register search. Enter the agent's name or registration number. If they are not listed, they are not registered. Do not deal with them.

Why it matters: If an unregistered agent handles your transaction and something goes wrong — misappropriation of deposit money, misrepresentation of property details, failure to disclose defects — you have no regulatory body to lodge a complaint with. BOVAEA only handles complaints against registered RENs and REAs. With an unregistered agent, your only recourse is civil court. That is expensive and slow.

The number of illegal agents operating in Malaysia is significant. BOVAEA has conducted multiple enforcement operations. Do not assume someone who hands you a business card with "Property Consultant" is registered. Check.

When You Do Not Need an Agent

Not every transaction requires an agent. Here are the scenarios where going direct makes sense.

1. Buying a new launch from a developer

Walk into the sales gallery yourself. The price is identical whether you come through an agent or not. The developer sets the price. If an agent brings you, the developer pays them from their marketing budget — it does not reduce or increase your price.

However, some agents offer to rebate part of their commission to you as a "cashback" on new launches. This is technically against BOVAEA rules, but it happens. If someone offers this, understand the risk: it is not enforceable, and the agent could renege.

2. Buying from someone you know

Family member, friend, colleague. You agree on a price directly. Appoint a lawyer to draft the SPA and handle the conveyancing. Total lawyer fees for both parties might be RM 10,000-15,000 for a RM 500K property. No agent commission needed.

3. Renting directly from a landlord

Platforms like iProperty, PropertyGuru, Mudah, and Facebook groups have direct landlord listings. You save the tenant-side commission (0.5-1 month rent). Draft a proper tenancy agreement — use a lawyer or a standard template reviewed by a lawyer. Do not skip the agreement to save money. That is how disputes happen.

4. Selling a property you know the market for

If you own a condo in a well-known development, you can list it on portals yourself. Comparable transaction data is available from JPPH/NAPIC and portal records. You save 2-3% commission. The trade-off: you handle viewings, negotiations, buyer qualification, and coordination with the lawyer yourself. For experienced property owners, this is feasible. For first-timers, the risk of missteps usually outweighs the savings.

What a Good Agent Actually Does

The conversation around agents tends to be polarized — either they are indispensable or they are useless middlemen. The truth depends on the agent and the transaction.

What a good agent provides:

• Market knowledge: Real-time data on what similar units sold for (not listed for — sold for). This is information that is hard to get without industry access.
• Negotiation: An experienced agent knows where the seller's floor is. For subsale, this can save you 5-10% off the asking price — multiples of the commission.
• Paperwork coordination: Liaising between buyer's lawyer, seller's lawyer, bank, valuer, and land office. For a first-time buyer, this coordination is invaluable.
• Bank connections: Good agents have relationships with bank officers who can fast-track applications or find solutions for borderline DSR cases.
• Due diligence: Checking for caveats, encumbrances, outstanding charges, bankruptcy status of seller, developer blacklists.

What a bad agent does:

• Pushes the highest-commission property, not the best-fit property
• Misrepresents rental yield or capital appreciation potential
• Fails to disclose known defects
• Disappears after collecting commission
• Does not verify buyer's financial capacity before committing seller's time

For investors buying subsale in unfamiliar areas, a good agent saves more than the commission. The RM 15,000-24,000 you "pay" (as a seller, or factored into the price as a buyer) buys you local expertise, negotiation leverage, and process management. For experienced investors buying in areas they know well, an agent adds less value.

Tax Treatment of Agent Commission

Commission payments have specific tax implications depending on the transaction type.

Commission on Sale (RPGT Calculation)

When you sell a property, the agent's commission is deductible from your RPGT (Real Property Gains Tax) calculation. It is classified as an "incidental cost of disposal."

Example:

Sale price:                 RM 800,000
Less: Acquisition cost:     RM 600,000
Less: Incidental costs:
  - Agent commission (2%):  RM  16,000
  - Legal fees:             RM   6,400
Chargeable gain:            RM 177,600

Without deducting the commission, your chargeable gain would be RM 193,600. At a 30% RPGT rate (disposal within 3 years), that saves you RM 4,800 in tax. Keep the agent's invoice. For full RPGT details, see our RPGT guide.

Commission on Purchase (Acquisition Cost)

The commission paid on purchase (if any) is added to your acquisition cost. This reduces your chargeable gain when you eventually sell.

Acquisition cost = Purchase price + stamp duty + legal fees + agent commission (if paid by buyer)

Commission on Rental (Rental Income Deduction)

Agent commission for finding a tenant is deductible from your rental income for tax purposes. Under Section 4(d) of the Income Tax Act 1967, the commission is an allowable expense against rental income.

Example:

Annual rental income:       RM 24,000
Less: Agent commission:     RM  2,000
Less: Other deductible expenses
Net rental income:          RM 22,000 (or less)

This reduces your taxable rental income. For the complete guide on rental income taxation, see our rental income tax guide.

Commission for Different Property Types

Quick Reference: The Numbers

For a RM 500,000 subsale property:

The buyer's total legal and stamp duty costs are roughly RM 20,000. The seller's agent commission is RM 15,000. These are separate costs borne by different parties. Do not confuse them.

For the complete breakdown of all property purchase costs, see our subsale process guide and our legal fees guide.

Sources

• Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242) — BOVAEA
• BOVAEA — Agent Registration and Public Register
• Income Tax Act 1967 — Section 4(d) Rental Income — LHDN
• JPPH / NAPIC — Property Transaction Data