Booking Fee for New Property in Malaysia: Legal Position, Checks and Refund Risks
The booking fee for new property in Malaysia has no legal cap of 2% or 3%, because Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989 says no one, including a stakeholder, may collect any payment that the sale and purchase agreement (SPA) does not prescribe. In practice almost every new launch still takes one. This guide explains where a booking fee (bayaran tempahan) actually stands, what to check before you pay, how refunds work when a loan is rejected, and why your booking receipt later decides how much late-delivery compensation you can claim.
Short answer
There is no legal cap on a booking fee for new property in Malaysia. Regulation 11(2) of the 1989 housing development regulations bars anyone, including a stakeholder, from collecting a payment the SPA does not prescribe, and KPKT’s homebuyer guide says developers may not take one before the SPA is signed. The familiar ‘3% maximum’ is market practice, not law.
Key numbers at a glance
| Governing rule | Regulation 11(2), Housing Development Regulations 1989 |
|---|---|
| Statutory cap | None; the '3% maximum' is not in any law |
| HBA's proposed cap | RM5,000 or 1% of the price, whichever is lower; still a proposal |
| LAD start date | The day the booking fee was paid (PJD Regency, 19 Jan 2021) |
| Loan refused on income after the SPA | Pay 1% of the price and the SPA ends (clause 6(3)) |
| First SPA instalment | 10% of the price; the booking fee is normally deducted |
| Pay to | An account in the developer's company name, with an official receipt |
| If a refund is refused | Complain to the housing ministry (KPKT) |
Key points in 30 seconds
- Regulation 11(2) bans any payment not prescribed by the SPA, and KPKT’s homebuyer guide says developers may not collect a booking fee before the SPA is signed, so the popular ‘3% maximum’ is not law.
- As at September 2026, the ‘Option to Purchase’ model (cap of RM5,000 or 1% of the price, whichever is lower) is a proposal from the National House Buyers Association (HBA), not law.
- The Federal Court in PJD Regency (grounds dated 19 January 2021) held that late-delivery damages (LAD) run from the date the booking fee was paid, not the SPA date.
- Once the statutory SPA is signed, a buyer who cannot get a loan because of income ineligibility, and proves it, pays only 1% of the price and the agreement ends.
- Before paying, check the developer’s licence and advertising and sales permit (APDL), pay only into the developer’s company account, and get the refund terms in writing.
Is a booking fee for new property legal in Malaysia?
Developer sales of housing are regulated by the Housing Development (Control and Licensing) Act 1966 (Act 118, the HDA) and its 1989 Regulations. Regulation 11(2) is short: no person, including anyone acting as a stakeholder, may collect any payment by whatever name called except as prescribed by the contract of sale. The 2015 amendment (P.U.(A) 106/2015) expressly added stakeholders, closing the route of having a law firm or agent hold the money instead.
KPKT’s own homebuyer guide (Panduan Pembeli Rumah) states that developers are not allowed to collect any booking fee before the SPA is signed, and that buyers whose refund is refused can complain to the ministry. So there is no ‘legal amount’ for a booking fee. There is only market practice.
Where does the '3% booking fee' figure come from?
I could not find any statute or regulation that allows a booking fee of up to 2% or 3%. The rule says developers may not collect it at all; it does not set a ceiling. The 2%–3% earnest deposit you see in subsale deals is a different thing, a private contract between buyer and seller. See subsale offer and earnest deposit.
Reform status as at September 2026
In a May 2026 EdgeProp column the HBA proposed an ‘Option to Purchase’ model: a fee capped at RM5,000 or 1% of the price (whichever is lower), a 30-day option period, and a full refund within 14 days if the buyer walks away. It is a proposal, not law. The Real Property Development Bill, meant to replace Act 118, was slated for tabling in June 2026; as at 10 August 2026 the minister said it was still in its final stage of review (Malay Mail, 10 August 2026), so it is not law yet. Ask your lawyer to confirm the rules in force when you sign.
What to check before paying a booking fee
The amount is usually small, but it is often the first money you hand to a company you have not checked. This is the list I go through with clients at the sales gallery:
- The developer’s licence and advertising and sales permit (APDL) are valid and match the numbers in the advertisement (see how to check a property developer and the KPKT register).
- The payee is an account in the developer’s company name, not an agent’s or salesperson’s personal account.
- The receipt shows the project, unit number, amount, date and the developer’s company name.
- The booking form states the list price, rebates, the net price and any costs the developer is absorbing (for example SPA legal fees).
- Refund terms are written down: what is returned, and within how many days, if the loan is rejected, if you change your mind, or if the developer changes the layout.
- The expected SPA signing date and whether the SPA is Schedule G, H, I or J (see Schedule G and H SPA explained).
- A loan pre-assessment shows you can afford it (see DSR, CCRIS and CTOS).
- Foreign buyers: confirm the state’s minimum price and consent rules first (see foreigner paperwork and costs).
The four mistakes I see most often
- Paying on the spot at the gallery before checking the loan. A time-limited rebate is not worth a booking you cannot finance. A rough affordability check takes less than half a day.
- Looking at the monthly figure, not the net price. Rebates, free furnishing and developer-paid legal fees are often bundled. Work out the net price, because that is what the bank will lend against.
- Checking the developer after booking. Licence, permit and the developer’s delivery record should be checked before money changes hands.
- Booking several projects at once to ‘hold’ units. Every refund may take effort to recover, and several loan applications at once can make your CCRIS record look rushed.
Sign the statutory SPA before the loan is approved and the downside is concrete. A refusal on income ineligibility, with written proof, costs 1% of the price, RM5,000 on a RM500,000 unit. Decline the loan or fail to cooperate, though, and you stay liable for the full price, with the SPA allowing the developer to terminate and forfeit 10%.
Ask Louis directly
Before you pay, send me the booking form and receipt and I'll check whether the refund terms are actually written down and whether the payee is the developer's company account.
I'll check the developer's licence and advertising and sales permit numbers against the KPKT register for free, look up their past delivery record, and send you the questions to ask at the sales gallery.
How long after booking do you sign the SPA?
Because the regulations do not recognise booking fees, there is no statutory deadline between booking and SPA; the developer sets it in its own form. A sensible order is:
- Pay the booking fee and fill in the booking formKeep the receipt and a copy of the form.
- Apply for the loan and get the letter of offer (LO)I recommend having the bank’s letter of offer before you sign the SPA. See home loan application process and bank letter of offer explained.
- Sign the SPA and pay the rest of the first 10%The first instalment under the statutory SPA is 10% of the price; the booking fee is normally deducted from it.
- Sign the loan agreementKPKT’s guide tells buyers to sign the loan agreement within about 30 days of the SPA (subject to the bank’s own deadline). See signing the SPA and loan agreement.
Why get the loan approved before signing?
The financing clause in the statutory SPA says the buyer should apply for a loan within 30 days of receiving the stamped SPA. If the loan fails because of income ineligibility and the buyer produces proof, the buyer pays the developer only 1% of the price and the agreement is terminated. But if the buyer declines the loan, does not comply with the bank’s requirements or is disqualified, the buyer remains liable for the full price. Having the LO in hand before you sign keeps you out of the second situation.
Can you get a booking fee refund if your loan is rejected?
The answer depends on the stage you are at:
| Situation | Legal or contract basis | Practical outcome |
|---|---|---|
| SPA not signed, loan rejected | Reg 11(2) bans payments outside the SPA; KPKT guide | You have strong grounds to demand a refund; complain to KPKT if refused |
| SPA not signed, you change your mind | As above, plus the booking form terms | Developers often deduct an admin fee, but that deduction has no basis in the regulations; demand the refund in writing |
| SPA signed, loan rejected on income, with proof | Statutory SPA financing clause (clause 6(3) in the Schedule G/H forms) | You pay 1% of the price and the SPA ends |
| SPA signed, you decline the loan or don’t cooperate | Clause 6(4) | Liable for the full price; the developer may terminate and forfeit part of what was paid |
Example: on a RM500,000 unit, if three banks reject you on income after the SPA is signed and you have the letters, the statutory exposure is RM5,000 (1%). That is far less than losing a 10% deposit (RM50,000), but it is still real money, which is why getting the loan approved first is the best protection.
How to chase a refund, step by step
- Gather the evidenceReceipt, bank transfer record, booking form, the bank’s rejection letter and screenshots of any refund promise.
- Make a written demandEmail or send by registered post to the developer company (not only the salesperson), stating the amount, the unit and a deadline such as 14 days.
- Complain to KPKTIf the developer refuses or goes silent, use KPKT’s complaint channels; its homebuyer guide says developers may not collect booking fees before the SPA.
- Consider legal actionFor larger sums or disputes after the SPA, speak to a lawyer first, then decide whether to file with the Tribunal for Homebuyer Claims.
Why LAD is counted from the booking fee date
The statutory SPA requires vacant possession (VP) within 24 months of the SPA date for landed homes (Schedule G) and 36 months for strata units (Schedule H). If the developer is late, it pays liquidated ascertained damages (LAD) of 10% a year of the price, calculated day by day. In PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah (grounds dated 19 January 2021) the Federal Court held that LAD is calculated from the date the booking fee was paid, because counting from a later SPA date would let developers sidestep the statutory protection.
| Item | Counted from SPA date | Counted from booking date |
|---|---|---|
| Start date | 1 Jun 2023 (SPA signed) | 1 Mar 2023 (booking paid) |
| 36-month deadline | 1 Jun 2026 | 1 Mar 2026 |
| Actual VP | 1 Sep 2026 | 1 Sep 2026 |
| Days late | 92 | 184 |
| LAD (10% x price x days / 365) | RM12,602.74 | RM25,205.48 |
Same project, same handover date, and the compensation doubles because of the start date. Keep the booking receipt until well after you collect the keys. A case often mixed up with this one is Ang Ming Lee (Federal Court, 26 November 2019), which is about extensions of time: it held that the Controller of Housing had no power to grant them. For LAD and EOT in detail see LAD and extension of time; to claim, see Tribunal for Homebuyer Claims.
Rebates, 'free legal fees' and the net price
Sales galleries often combine rebates, developer-paid SPA legal fees and furnishing packages. Points to watch:
- Loans follow the net price. Since 2013 Bank Negara Malaysia (BNM) has required banks to base the loan on the net selling price after rebates, so a rebate cannot be used to borrow more.
- ‘Free legal fees’ cannot be advertised. Regulation 8(1A), added in 2015, bars licensed developers from advertising an ‘offer of free legal fees’. Developer-paid fee arrangements still exist, but get them in writing and find out whom that lawyer represents (see what each lawyer does).
- First-home stamp duty exemption depends on price. Malaysian first-time buyers of a home up to RM500,000, with an SPA signed from 1 January 2026 to 31 December 2027, are fully exempt from stamp duty on the transfer and loan agreement. This is the rule as at September 2026; Budget 2027 is expected in early October. See stamp duty and legal fees.
- Freebies belong in a letter. The statutory SPA terms cannot be freely changed, so appliances or renovation packages are usually promised in a side letter. Get the signed original before you sign the SPA.
To estimate your total cash outlay, use the buying-costs calculator or read how much money you need to buy a house. More new-launch guides are in the new property hub.
Related questions
Can a developer deduct an admin fee from a booking refund?
Developers often do, but the deduction has no basis in the regulations, which do not recognise payments outside the SPA at all. Ask in writing, email is fine, addressed to the developer company rather than the salesperson, attach the receipt, booking form and any rejection letter, and set a date. If the refund is refused or ignored, complain to KPKT.
Do developer rebates change how much I can borrow?
Yes. Since 2013 Bank Negara has required banks to base the loan on the net selling price after rebates, so a rebate cannot be turned into a bigger loan. When you read the booking form, separate the list price, the rebates and any costs the developer absorbs, and work out the net price, because that is the figure the bank lends against.
Is it a problem to book several units at once?
It usually is. Every booking is money you may have to chase back, and several loan applications filed in a short window make your CCRIS record look rushed to the next bank that reads it. Do an affordability check first, settle on the price range and unit type you can actually finance, then pay one booking fee.
How is a booking fee different from a subsale earnest deposit?
They sit on different legal footing. New-launch sales fall under the Housing Development Act, whose regulations bar a developer from collecting anything the SPA does not prescribe. In subsale, the 2%-3% earnest deposit is a private contract between buyer and seller, usually held by a lawyer or agent as stakeholder. See subsale offer and earnest deposit.
Frequently asked questions
Is there a maximum booking fee for new property in Malaysia?
No. Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989 forbids collecting any payment not prescribed by the SPA, so there is no legal ceiling such as 3%; the regulation does not allow the fee at all. The HBA’s proposed cap of RM5,000 or 1% (whichever is lower) is still only a proposal as at September 2026.
Can I get my booking fee back if my housing loan is rejected?
Before the SPA is signed, you have strong grounds for a refund because the regulations ban payments outside the SPA, and you can complain to KPKT if the developer refuses. After signing the statutory SPA, if the loan fails because of income ineligibility and you provide proof, you pay only 1% of the price and the agreement is terminated.
Who should I pay the booking fee to?
Only to an account in the developer’s company name, and ask for an official receipt showing the company’s name, the unit and the amount. Do not transfer money to an agent’s or salesperson’s personal account or accept a handwritten note as your only record.
Does LAD start from the booking date or the SPA date?
From the booking date. In PJD Regency (Federal Court, grounds dated 19 January 2021) the court held that LAD for late vacant possession is calculated from the date the booking fee was paid. LAD is 10% a year of the price, counted day by day, so keep your booking receipt until after handover.
How many days after booking must I sign the SPA?
No statutory deadline exists, because the regulations do not recognise booking fees in the first place. The developer sets the period in its booking form. I advise clients to get the bank’s letter of offer first and sign the SPA only after that, so that a loan problem cannot arise after signing.
What happens if I back out after signing the SPA for a new property?
If you default on payment for more than 30 days, the developer can terminate by written notice and forfeit the amount the statutory SPA prescribes (10% of the price in the Schedule G text). Check the exact wording of your own SPA with your lawyer before deciding anything.
Sources & verification
- KPKT / JPN — Panduan Pembeli Rumah (22 Apr 2021)
- Johore Bar — Salient amendments, HDR (Amendment) Regulations 2015
- Lee and Chong — P.U.(A) 106/2015 legal update (1 Jun 2015)
- EdgeProp — Legalising booking fees: the case for reform (14 May 2026)
- Mah Weng Kwai and Associates — LAD calculated from booking fee date (PJD Regency)
- REHDA Melaka — Schedule H (substituted 2015 form, Housing Development (Control and Licensing) Regulations 1989)
- REHDA Melaka — Schedule G (substituted 2015 form)
- Thomas Chambers — VP, extension of time and LAD claims
- iProperty — BNM lending policies (net selling price, DIBS ban)
- The Star — Budget 2026: first-home stamp duty exemption extended (10 Oct 2025)
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
More in this stage
Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
I'll check the developer's licence and advertising and sales permit numbers against the KPKT register for free, look up their past delivery record, and send you the questions to ask at the sales gallery.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT