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If you're a foreigner considering buying residential property in Penang in 2026, the costs, taxes, and fees can add up quickly and catch you off guard.
Penang applies a state consent levy on top of Malaysia's national stamp duty, which makes it one of the more expensive states for foreign buyers in the country.
This article is regularly updated to reflect the latest regulations and costs, so you always have fresh, reliable information at your fingertips.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Penang.
Overall, how much extra should I budget on top of the purchase price in Penang in 2026?
How much are total buyer closing costs in Penang in 2026?
As of early 2026, foreign buyers in Penang should expect total closing costs of roughly 12% to 18% of the purchase price, which translates to RM120,000 to RM180,000 (approximately USD 27,000 to USD 41,000 or EUR 25,000 to EUR 38,000) on a RM1 million property.
At the bare legal minimum, keeping all optional extras aside, you would still need around 12% to 13% of the price for the mandatory taxes and consent fees, meaning at least RM120,000 to RM130,000 (around USD 27,000 to USD 29,000 or EUR 25,000 to EUR 27,000) on a RM1 million purchase.
If you plan to take out a bank loan, add extra legal checks, or face a more complex title situation, the realistic maximum budget should be around 17% to 18% of the purchase price, so RM170,000 to RM180,000 (approximately USD 38,000 to USD 41,000 or EUR 36,000 to EUR 38,000) on the same RM1 million property.
The main factors that push your Penang closing costs toward the higher end include financing (loan stamp duty at 0.5% plus loan legal fees), whether you buy strata or landed property (landed carries higher levies in some cases), and additional services like professional translation or independent building inspections.
What's the usual total % of fees and taxes over the purchase price in Penang?
For foreign individuals buying residential property in Penang in 2026, the usual total percentage of fees and taxes over the purchase price falls between 14% and 16%, which accounts for the most common transaction scenarios.
The realistic low-to-high range is 12% to 18%, with simpler cash purchases at the lower end and fully financed deals with extra due diligence at the higher end.
Of that total, government taxes and state charges typically make up the largest portion, roughly 11% to 14% (stamp duty plus the Penang state consent levy), while professional service fees like legal costs and disbursements account for about 1% to 3%.
By the way, you will find much more detailed data in our property pack covering the real estate market in Penang.
What costs are always mandatory when buying in Penang in 2026?
As of early 2026, the mandatory costs for foreign buyers in Penang include the state consent application fee (RM10,000 per title), the state consent levy (commonly 1.5% to 3% of the purchase price), stamp duty on the transfer instrument (8% flat rate for foreigners from January 2026), your buyer's conveyancing lawyer fee (regulated scale), and basic disbursements like title searches and land office registration.
While not legally required, highly recommended costs include an independent building inspection (especially for older properties), professional translation if you are not comfortable with Malay or English documents, extra legal checks on renovation approvals or strata by-laws, and, if you are financing, a bank valuation plus loan legal fees and loan stamp duty.
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What taxes do I pay when buying a property in Penang in 2026?
What is the property transfer tax rate in Penang in 2026?
As of early 2026, the property transfer tax in Penang for foreign buyers is essentially the stamp duty on the Memorandum of Transfer (MOT), which now stands at a flat rate of 8% of the property value for non-citizens and non-permanent residents, replacing the previous tiered structure.
Yes, foreigners face an additional state-level charge in Penang through the state consent levy, commonly between 1.5% and 3% of the acquisition value depending on whether you buy strata or landed property, and whether it is on the island (Pulau Pinang) or mainland (Seberang Perai).
Malaysia does not apply a separate VAT on residential property purchases the way some European countries do, so your main tax-like charges at purchase are the stamp duty and the Penang state consent levy.
Stamp duty in Penang is paid when your lawyer sends the transfer instrument (MOT or Form 14A) for stamping, typically handled within 30 days of document execution to avoid penalties, and it is calculated as a percentage of the property's value or market value, whichever is higher.
Are there tax exemptions or reduced rates for first-time buyers in Penang?
Malaysia offers stamp duty exemptions for first-time Malaysian buyers purchasing homes up to RM500,000, extended until December 2027, but foreign buyers in Penang generally do not qualify for these exemptions because they are designed for citizens.
If you buy property through a company instead of as an individual, the Penang state consent application fee increases to RM20,000 (versus RM10,000 for individuals), and corporate tax treatment on rental income and eventual sale may differ materially from personal ownership.
There is typically no stamp duty difference between buying a new-build versus a resale property in Penang, though your legal fee structure may vary because the Solicitors' Remuneration Order includes a different scale for transactions under housing development legislation (developer sales).
First-time buyer exemptions in Malaysia require documentation proving you have never owned residential property before and that you meet the price and timing conditions, but since these exemptions rarely apply to foreigners, you should assume full rates apply and confirm any eligibility directly with your lawyer at the deal date.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Malaysia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
Which professional fees will I pay as a buyer in Penang in 2026?
How much does a notary or conveyancing lawyer cost in Penang in 2026?
As of early 2026, conveyancing lawyer fees in Penang follow a regulated scale and typically cost around RM11,250 (approximately USD 2,500 or EUR 2,350) on a RM1 million purchase, and around RM31,250 (approximately USD 7,000 or EUR 6,500) on a RM3 million purchase, before disbursements.
Lawyer fees in Penang are charged as a percentage of the property price based on a tiered scale: 1.25% on the first RM500,000, 1% on the next RM7,000,000, and negotiable rates above that, so fees are fairly consistent across firms because they are regulated by the Solicitors' Remuneration Order 2023.
Translation or interpreter services for foreign buyers in Penang typically cost between RM300 and RM2,000 (approximately USD 70 to USD 450 or EUR 65 to EUR 420), depending on whether you need ad-hoc interpretation at signing or certified translations of multiple legal documents.
Most foreign buyers do not need a tax advisor for a straightforward personal purchase, but if you have cross-border income complexity or plan to rent out immediately, a one-off consultation in Penang typically costs RM800 to RM3,000 (approximately USD 180 to USD 680 or EUR 170 to EUR 630).
We have a whole part dedicated to these topics in our our real estate pack about Penang.
What's the typical real estate agent fee in Penang in 2026?
As of early 2026, the typical real estate agent fee in Penang is up to 3% of the sale price (around RM30,000 or approximately USD 6,800 or EUR 6,300 on a RM1 million transaction), subject to agreement and professional rules overseen by the Board of Valuers, Appraisers, Estate Agents and Property Managers.
In most Penang resale transactions, the seller pays the agent commission, and the buyer only pays if they separately engage an agent to represent them, so you should confirm who pays what in writing before viewing or booking any property.
The realistic low-to-high range for agent fees in Penang is typically 2% to 3% of the sale price, with some room for negotiation depending on market conditions and the complexity of the transaction.
How much do legal checks cost (title, liens, permits) in Penang?
Legal checks in Penang, including title search, liens verification, and registration admin, typically cost between RM800 and RM3,000 (approximately USD 180 to USD 680 or EUR 170 to EUR 630) as part of your lawyer's disbursements, with higher amounts for complicated title situations.
If you are taking a mortgage, the bank will usually require a property valuation, which costs around RM500 to RM2,500 (approximately USD 110 to USD 570 or EUR 105 to EUR 525) for typical residential values in Penang.
The title search is the most critical legal check that should never be skipped in Penang, because it confirms ownership, encumbrances, and ensures state consent will actually be granted for your specific purchase.
Buying a property with hidden issues is something we mention in our list of risks and pitfalls people face when buying real estate in Penang.
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What hidden or surprise costs should I watch for in Penang right now?
What are the most common unexpected fees buyers discover in Penang?
The most common unexpected fees foreign buyers discover in Penang include the state consent levy (which scales with price and can reach 3% or more), strata-related payments like management fund balances, move-in deposits, and renovation deposits, plus loan extras such as valuation, loan stamp duty (0.5% on the loan amount), and loan legal fees.
Yes, you could potentially inherit unpaid property taxes or management arrears when purchasing in Penang, which is why your lawyer should verify all outstanding assessment tax, quit rent, and strata arrears are settled before completion, as MBSP explicitly warns about these risks.
Scams with fake listings or fake fees do occur in Penang, so you should avoid paying "booking fees" to unverified parties and never pay "consent" or "processing" fees outside the official lawyer and PTG channel, because the legitimate process goes through regulated professionals only.
Fees usually not disclosed upfront in Penang include strata move-in and renovation deposits, bank administrative fees, numerous small lawyer disbursements, and additional consent-related admin if your documents are incomplete or need corrections.
In our property pack covering the property buying process in Penang, we go into details so you can avoid these pitfalls.
Are there extra fees if the property has a tenant in Penang?
If the property has a tenant in Penang, extra costs typically include tenancy agreement stamp duty or stamping admin if you take over an existing lease, handover coordination costs for inventory checks and utilities transfer, and potential deposit settlement between the seller and tenant, which could add RM500 to RM3,000 (approximately USD 110 to USD 680 or EUR 105 to EUR 630).
When purchasing a tenanted property in Penang, you inherit the existing tenancy agreement and are legally bound by its terms, including the rent amount, duration, and tenant rights until the lease expires.
It is generally not possible to terminate an existing lease immediately after purchase in Penang unless the tenancy agreement includes early termination clauses or the tenant agrees to vacate, so you should review the lease carefully before buying.
A sitting tenant typically affects the property's market value in Penang by potentially discouraging owner-occupier buyers, which may give you more negotiating leverage on price, but it also means delayed personal use if you intended to occupy the property yourself.
If you want to optimize your rental strategy, you can read our complete guide on how to buy and rent out in Penang.
We have made this infographic to give you a quick and clear snapshot of the property market in Malaysia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which fees are negotiable, and who really pays what in Penang?
Which closing costs are negotiable in Penang right now?
Negotiable closing costs in Penang include who pays which lawyer (especially in new launches where developers may cover SPA legal fees), disbursement markups (always ask for an itemized estimate), and agent commission within the agreed market range of 2% to 3%.
Fixed by law and not negotiable in Penang are the state consent levy percentage and application fee (RM10,000 for individuals), and the stamp duty rate payable to the government (now 8% for foreigners from January 2026).
On negotiable fees like legal disbursements or agent commission, buyers in Penang can realistically achieve discounts of 10% to 20% depending on the complexity of the deal and market conditions, though the core rates remain regulated.
Can I ask the seller to cover some closing costs in Penang?
Yes, in Penang there is a moderate likelihood that sellers will agree to cover some closing costs, especially in softer market segments, strata properties in oversupplied areas, or when the seller needs certainty and a quick sale.
The specific closing costs sellers are most commonly willing to cover in Penang include legal disbursements, clearing all outstanding arrears and management balances, and in new-build developer promotions, the SPA legal fees are sometimes absorbed as part of the package.
Sellers in Penang are more likely to accept covering closing costs during slower market periods, when their property has been listed for a long time, or when they are under pressure to sell quickly, giving buyers with flexibility more negotiating power.
Is price bargaining common in Penang in 2026?
As of early 2026, price bargaining is common in Penang's residential property market, particularly for resale condos and older properties, though the extent varies by micro-location, property type, and supply dynamics in areas like George Town, Tanjung Bungah, Batu Ferringhi, or Butterworth.
Buyers in Penang typically negotiate around 3% to 8% below the asking price on resale listings (roughly RM30,000 to RM80,000 or approximately USD 6,800 to USD 18,000 or EUR 6,300 to EUR 16,800 on a RM1 million property), with more room for trophy units or distressed sellers.
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What monthly, quarterly or annual costs will I pay as an owner in Penang?
What's the realistic monthly owner budget in Penang right now?
The realistic monthly owner budget in Penang for a typical strata condo is around RM500 to RM2,000 (approximately USD 110 to USD 450 or EUR 105 to EUR 420) excluding your mortgage, with the exact amount depending heavily on the condo's facilities and location.
The main recurring expense categories that make up this monthly budget in Penang include the maintenance fee plus sinking fund (typically the largest item), utilities (electricity, water, internet), building insurance (sometimes embedded in strata charges), and a pro-rated portion of assessment tax and quit rent.
The realistic low-to-high range for monthly owner costs in Penang is RM300 to RM3,000 or more (approximately USD 70 to USD 680 or EUR 65 to EUR 630), with basic apartments at the lower end and luxury seafront condos with extensive facilities at the higher end.
The maintenance fee tends to vary the most in Penang because it depends on the age of the building, the quality of facilities (pool, gym, security, landscaping), and the efficiency of the management corporation, making it essential to check the exact fee before buying.
You can see how this budget affect your gross and rental yields in Penang here.
What is the annual property tax amount in Penang in 2026?
As of early 2026, annual property tax in Penang consists of two main charges: assessment tax (cukai taksiran) billed twice yearly by MBPP or MBSP based on your property's annual value and a rate percentage, and quit rent (cukai tanah) payable annually under the new 2026 rate structure that includes a charge per square metre and a minimum per lot.
The realistic low-to-high range for annual property taxes in Penang is roughly RM200 to RM3,000 or more (approximately USD 45 to USD 680 or EUR 42 to EUR 630) depending on your property's size, value, and exact location on the island versus the mainland.
Assessment tax in Penang is calculated based on the annual value of your property (an estimate of yearly rental potential) multiplied by a rate set by MBPP or MBSP, typically around 5% to 5.5% for residential properties, while quit rent is based on land area and category.
Exemptions or reductions for property owners in Penang are limited, though Penang announced rebates for the 2026 quit rent changes, so you should verify current rebate levels with your lawyer or the local land office when finalizing your purchase.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Malaysia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
If I rent it out, what extra taxes and fees apply in Penang in 2026?
What tax rate applies to rental income in Penang in 2026?
As of early 2026, rental income in Penang for non-resident foreigners (those staying less than 182 days in Malaysia per year) is taxed at a flat rate of 30% on chargeable income, with no personal reliefs or exemptions available.
Yes, landlords in Penang can deduct rental-related expenses from their gross rental income, including property management fees, repairs, assessment tax, quit rent, and agent commissions, though the exact deductibility and documentation requirements depend on whether your rental is treated as passive income or business income.
After allowable deductions, the realistic effective tax rate for non-resident landlords in Penang remains high at around 20% to 30% of gross rental income, depending on how much you can legitimately claim as expenses, making tax planning essential before you buy to let.
Yes, foreign property owners who are non-residents in Malaysia pay a significantly higher rental income tax rate (flat 30%) compared to Malaysian tax residents, who are taxed on progressive rates from 0% to 30% based on total income and can claim personal reliefs.
Do I pay tax on short-term rentals in Penang in 2026?
As of early 2026, short-term rental income in Penang is taxable as part of your Malaysian-source income, and if you operate like accommodation (such as Airbnb-style rentals), you may also trigger tourism tax (TTx) obligations at RM10 per room per night for foreign tourist guests.
Short-term rental income is not necessarily taxed differently than long-term rental income in terms of income tax rates, but the operational requirements differ because you may need to register for tourism tax, comply with local council regulations on short-term stays, and check your condo's strata by-laws for any restrictions on short-term letting.
If you want to optimize your rental strategy, you can read our complete guide on how to buy and rent out in Penang.
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If I sell later, what taxes and fees will I pay in Penang in 2026?
What's the total cost of selling as a % of price in Penang in 2026?
As of early 2026, the total cost of selling a property in Penang for a foreign owner is typically around 3% to 6% of the sale price for agent commission and legal fees, plus any Real Property Gains Tax (RPGT) due on your profit.
The realistic low-to-high percentage range for total selling costs in Penang is 3% to 6% before RPGT, rising significantly higher if you sell within five years of purchase and owe 30% tax on your capital gain.
The specific cost categories that make up selling expenses in Penang include agent commission (commonly up to 3%), seller's legal fees (regulated scale similar to buying), any early mortgage repayment penalties if applicable, and administrative disbursements.
The single largest cost when selling in Penang for a foreigner is typically the Real Property Gains Tax if you sell within five years, because the 30% rate on profits can far exceed all other selling expenses combined.
What capital gains tax applies when selling in Penang in 2026?
As of early 2026, Real Property Gains Tax (RPGT) in Penang applies at 30% of your profit if you sell within five years of purchase, dropping to 10% if you sell after six years or more, with rates based on your holding period from the date of the Sale and Purchase Agreement.
Exemptions to capital gains tax in Penang include a personal exemption of RM10,000 or 10% of the chargeable gain (whichever is higher) per disposal for individuals, and a once-in-a-lifetime private residence exemption for Malaysian citizens and permanent residents, though foreigners generally cannot claim this.
Yes, foreigners pay a different and typically higher RPGT rate when selling property in Penang, with 30% in years one to five and 10% from year six onwards, compared to Malaysian citizens who pay 0% after five years of ownership.
The capital gain in Penang is calculated as the disposal price minus the acquisition price (including stamp duty and legal fees paid at purchase), minus allowable expenses like renovation costs with receipts and agent commissions at sale, with the net chargeable gain then taxed at the applicable RPGT rate.
We made this infographic to show you how property prices in Malaysia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Penang, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Penang Bar Conveyancing Practice Subcommittee | Practitioner guide compiled by lawyers working with PTG Penang. | We used it to pin down the foreign-buyer minimum prices and state consent levy percentages by property type. We also referenced it for the RM10,000 application fee. |
| PTG Penang (Pejabat Tanah dan Galian) | Official Penang land office administering state consent for foreign ownership. | We used it to cross-check the state consent process and verify the charges foreigners face. We treated it as an official reality check against lawyer summaries. |
| LHDN (Inland Revenue Board) | Federal authority that administers stamp duty and RPGT in Malaysia. | We used it as the official anchor for stamp duty concepts and RPGT rates. We paired it with Big-4 summaries for practical property rates and timelines. |
| PwC Malaysia Tax Booklet | Widely used technical reference summarizing Malaysian tax law changes. | We used it for loan stamp duty rates, stamping deadlines, and RPGT calculation methods. We also used it to triangulate buyer-side duties in real deals. |
| Malaysian Bar (Solicitors' Remuneration Order 2023) | The working PDF lawyers actually reference for regulated legal fees. | We used it to calculate typical SPA and loan legal fees from scale tables. We also used it to explain why legal fees are similar across firms in Penang. |
| AGC Malaysia (Attorney General's Chambers) | Official gazette portal hosting the subsidiary legislation on legal fees. | We used it to confirm the legal fee schedule is statutory law, not a blog estimate. We used it to justify the conveyancing fee ranges we quote. |
| MBPP (Penang Island City Council) | Official local authority for Penang Island's assessment tax administration. | We used it to explain how assessment tax is calculated and billed twice yearly. We used it to frame owner carrying-cost estimates in a Penang-specific way. |
| MBSP (Seberang Perai City Council) | Official local authority for mainland Penang property tax administration. | We used it to highlight buyer risks like arrears checks and late payment consequences. We used it to justify why management and arrears letters matter at closing. |
| New Straits Times | Major national newspaper reporting Penang's announced quit rent reforms. | We used it for the 2026 quit rent rate structure and effective date. We treated it as a secondary source and cross-checked against other coverage. |
| KPMG Malaysia Budget 2026 Analysis | Big-4 accounting firm's technical note on stamp duty changes for 2026. | We used it to confirm the 8% stamp duty rate for foreign buyers from January 2026. We used it to explain the policy rationale and regional comparisons. |
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