When hunting for a property to buy, the main question to ask yourself is always: “How much can I afford?”

While the two price tags people would typically look at are the down-payment amount and the monthly instalments, there are other costs that you need to consider as well, such as:

1. Upfront fees and charges

You do need to set aside money for the paperwork required to make your property purchase legal.

How much exactly that is depends on the price of the property you have purchased.

The following are the items you need to find out the cost of and are dependent on your property price:

• Sale & Purchase Agreement (SPA): This consists of legal fees, stamp duty and legal disbursement fees.

• Loan agreement: This also consists of legal fees, stamp duty and legal disbursement fees.

• Transfer of ownership aka memorandum of transfer (MOT): This comprises the fee and stamp duty fees.

• Tax on legal agreements

• Bank administrative charges for your home loan

• Property agent fees (if you made your purchase with the help of any)

• Runner fees (if you used any)

Bear in mind that these need to be paid upfront so you absolutely need to have the total sum ready at hand when you make your decision to purchase a home.

2. Utility deposit and charges

To make your property suitable for habitation, you will need certain basic utilities and services, such as:

• Electricity – Tenaga Nasional Berhad (TNB)
• Water
• Sewerage – Indah Water
• Internet/Broadband

To open your account with each of these service providers, there will generally be forms to fill, a deposit required, and payment needed for miscellaneous fees to cover installation, administrative processing, and stamp duty.

3. Malaysian property tax

As a homeowner, you are legally required to pay tax on your property every year. Here are the property taxes you need to be aware of.

• Quit rent or cukai tanah
• Parcel tax or cukai petak
• Property assessment rates or cukai pintu

Quit rent is collected by the state government’s Land Office or Pejabat Tanah Dan Galian (PTG).

This is the tax on the land your property is built on. You can think of it as land tax.

For strata buildings (highrise buildings) in some states, quit rent is charged to the Joint Management Body (JMB) of these buildings and they include it as part of your maintenance charges, meaning homeowners in this situation are not individually charged by the Land Office.

Parcel tax is a relatively new tax introduced in Penang and Kuala Lumpur so far, and it is also collected by the state government’s Land Office or Pejabat Tanah Dan Galian (PTG).

This is the quit rent equivalent for property which is divided into parcels, such as apartments.

Property assessment rates are collected by local councils to be used in developing and maintaining local area infrastructure and services. Think of the nice public parks and garbage collection services in your area.

4. Home insurance

For many people, a property is one of the biggest assets that one can hold. As such, it makes sense to take out some form of insurance policy as recovery protection against any unforeseen circumstances.

The options for protecting your property include:

• Basic fire insurance
• Houseowner insurance
• Householder insurance

5. Monthly maintenance and sinking fund

When buying strata or gated community property, you are part of a larger private community managed by a Joint Management Body (JMB).

Thus, you will likely be contributing regularly to these familiar charges.

The maintenance fees are generally used for the regular maintenance of common facilities you share with others in your private community, such as elevators, swimming pool, and gym, or the payment of common services such as cleaners and security.

The sinking fund is a larger sum of money for large and sudden expenses, such as should the elevator suffer a breakdown and need replacing.

In other words, it is the emergency fund of your community.

Speak to your JMB to find out what is the expected sum you should pay if you are a homeowner.

6. Furnishings, renovation and upkeep

Regardless of the condition of the property you intend to purchase, you need to consider both the immediate costs for personalising it to your liking and its maintenance.

Consider the upkeep of the property as well. For example, is the interior design dated or is it evergreen? Will you have time to maintain your lawn?

If you are buying a subsale property with furniture included, make sure you are agreeable to everything. Otherwise, it can cost you a pretty penny to hire someone to cart away the unwanted items.

This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.