Sale and Purchase Agreement — Subsale (Malaysia)
SALE AND PURCHASE AGREEMENT (SUBSALE)
Contracts Act 1950 (Act 136) | National Land Code 1965 | Stamp Act 1949 | Real Property Gains Tax Act 1976
THIS SALE AND PURCHASE AGREEMENT is made on [SPA Date]
BETWEEN:
(1) [Vendor Name] of [Vendor Address] (hereinafter referred to as the "Vendor"); AND
(2) [Purchaser Name] (NRIC/Passport No: [Purchaser NRIC]) of [Purchaser Address] (hereinafter referred to as the "Purchaser").
1. THE PROPERTY
1.1 The Vendor agrees to sell and the Purchaser agrees to purchase all that property known as [Property Address], Title Reference: [Title Reference], held on [Property Tenure] tenure (leasehold expiry: [Leasehold Expiry Date]), free from all encumbrances save as disclosed herein ("the Property").
1.2 The Property is sold [VP Condition]. The Vendor warrants that the Property is free from all legal or structural defects that would materially affect the Purchaser's title or right to use the Property.
2. PURCHASE PRICE AND PAYMENT
2.1 The purchase price of the Property is [Purchase Price].
2.2 The Purchase Price shall be paid as follows:
(a) Deposit of [Deposit Amount] payable upon execution of this Agreement; and
(b) Balance purchase price of [Balance Purchase Price], less the RPGT retention of [RPGT Retention], payable on or before [Completion Date] (the "Completion Date").
2.3 The Purchaser may extend the Completion Date by 30 days upon written notice and payment of interest on the balance purchase price at 8% per annum calculated daily.
3. REAL PROPERTY GAINS TAX RETENTION
3.1 The Purchaser shall retain [RPGT Retention] (representing 3% of the Purchase Price) from the balance purchase price and remit the same to the Inland Revenue Board of Malaysia (LHDN) within 60 days from the date of this Agreement, pursuant to Section 21B of the Real Property Gains Tax Act 1976.
3.2 The Vendor shall file the required RPGT return (CKHT Form) with LHDN within the prescribed period following the disposal.
4. DEFAULT
4.1 If the Purchaser fails to pay the balance purchase price by the Completion Date (as extended if applicable), the Vendor shall be entitled to forfeit the Deposit as liquidated damages and treat this Agreement as rescinded.
4.2 If the Vendor fails to deliver the Property or execute the Memorandum of Transfer by the Completion Date through no fault of the Purchaser, the Purchaser shall be entitled to rescind this Agreement and recover all monies paid together with interest at 8% per annum.
5. TRANSFER OF TITLE
5.1 The Vendor shall, concurrently with receipt of the full balance purchase price (less RPGT retention), execute a Memorandum of Transfer (Form 14A under the NLC 1965) in favour of the Purchaser and deliver all title documents to the Purchaser's solicitors.
5.2 The Purchaser bears all stamp duty, legal fees, and registration costs relating to the transfer.
Vendor
________________
Signature
Purchaser
________________
Signature
What Is a Sale and Purchase Agreement — Subsale (Malaysia)?
A Sale and Purchase Agreement — Subsale in Malaysia sets out the terms on which the seller agrees to transfer the subject matter to the buyer.
Subsale SPAs in Malaysia are governed by the general law of contract under the Contracts Act 1950 (Act 136) and the National Land Code 1965 (NLC 1965). The Bar Council Malaysia publishes standard form subsale SPAs for landed and strata properties that are widely used by conveyancing solicitors registered under the Legal Profession Act 1976. The standard subsale SPA provides for a completion period of 90 days from the date of the SPA, with a 30-day extension option upon payment of interest at 8% per annum on the balance purchase price.
Real Property Gains Tax (RPGT) under the Real Property Gains Tax Act 1976 (RPGT Act 1976) is a material consideration in subsale transactions. Under Section 21B of the RPGT Act 1976, the purchaser must withhold 3% of the purchase price from the balance payable to the vendor and remit it to the Inland Revenue Board of Malaysia (LHDN) within 60 days of the date of disposal. The vendor then files a RPGT return with LHDN and is assessed on the chargeable gain, with any excess of the 3% retention refunded.
Stamp duty on a subsale SPA is assessed under the Stamp Act 1949 (Act 378) at ad valorem rates on the purchase price. The stamping is done at LHDN's e-Stamping portal or LHDN offices. The unstamped SPA is inadmissible as evidence in civil proceedings under Section 52 of the Stamp Act 1949.
The legal framework governing the Sale and Purchase Agreement — Subsale (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Sale and Purchase Agreement — Subsale (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Land Code 1965 (Act 56) sets the foundational requirements.
When Do You Need a Sale and Purchase Agreement — Subsale (Malaysia)?
A subsale SPA is required in Malaysia whenever a buyer purchases a completed property directly from an owner in the secondary market.
A subsale SPA is required when purchasing a completed terraced house, semi-detached house, or bungalow from an individual owner. The SPA documents the agreed purchase price, the payment schedule (typically 10% deposit on signing and 90% within 90 days), and the delivery of vacant possession or subject-to-tenancy conditions.
A subsale SPA is needed when purchasing a completed condominium or apartment from a private owner — an individual investor, a property company, or a financial institution disposing of foreclosed property. The SPA must address the strata title status, outstanding maintenance charges, and the procedure for transfer of the strata title.
A subsale SPA is required when property is sold following the death of the owner, where the administrator or executor appointed under a Grant of Letters of Administration or Grant of Probate from the High Court of Malaya disposes of estate property under the Probate and Administration Act 1959 (Act 97).
A subsale SPA is needed when a financial institution such as a bank regulated by Bank Negara Malaysia disposes of property seized under a court order for foreclosure pursuant to Order 83 of the Rules of Court 2012, following the borrower's default on a housing loan.
A subsale SPA is required when purchasing a government staff quarter, a People's Housing Programme (PPR) unit, or affordable housing scheme property subject to a restriction on disposal or charge endorsed on the title under Section 43 of the National Land Code 1965, requiring prior consent of the state authority before the transaction can proceed.
Parties in Malaysia should prepare a Sale and Purchase Agreement — Subsale (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Sale and Purchase Agreement — Subsale (Malaysia)
A complete Malaysia subsale SPA must contain the following essential elements under the NLC 1965, Contracts Act 1950, and RPGT Act 1976.
Parties: Full legal names, MyKad or passport numbers of vendor and purchaser(s). For corporate vendors or purchasers, the SSM company registration number, authorised signatories, and the board resolution under the Companies Act 2016 authorising the transaction.
Property description and title: The full property address, lot number or parcel number, title reference (Geran, Pajakan Negeri, or Hakmilik Strata), land area or built-up area, tenure (freehold/leasehold), expiry date of leasehold title if applicable, and any restrictions in interest or conditions of title endorsed on the title document.
Purchase price, deposit, and balance: The agreed purchase price in RM, the deposit payable on signing (typically 10%), the balance purchase price payable within the completion period (typically 90 days from the date of the SPA), and the consequences of default — forfeiture of deposit by purchaser's default, or rescission and return of deposit plus damages for vendor's default.
Vacant possession: Whether the property is sold with vacant possession (for owner-occupied properties) or subject to an existing tenancy (with the tenancy agreement disclosed). If sold with VP, the deadline and the landlord's liability for mesne profits for any over-holding by a tenant.
Encumbrances and charges: The vendor's warranty that the property is free from all encumbrances, or a schedule of disclosed encumbrances (bank charges, caveats, liens) to be discharged by the vendor's solicitors from the proceeds of sale before or concurrently with completion.
RPGT retention: The purchaser's obligation under Section 21B of the RPGT Act 1976 to retain 3% of the purchase price from the balance payable to the vendor and remit it to LHDN within 60 days of the disposal date, with a corresponding deduction from the amount payable to the vendor at completion.
Title transfer: The vendor's obligation to execute and deliver the Memorandum of Transfer (Form 14A under the NLC 1965) or, for pending title properties, a Deed of Assignment and Power of Attorney, enabling the purchaser's solicitors to register the transfer at the Pejabat Tanah dan Galian of the relevant state.
Additional compliance elements for a Sale and Purchase Agreement — Subsale (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Forms Legal. (2026). Sale and Purchase Agreement — Subsale (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/real-estate/purchase-sale/sale-purchase-agreement-subsale-malaysia
"Sale and Purchase Agreement — Subsale (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/real-estate/purchase-sale/sale-purchase-agreement-subsale-malaysia.
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note = {Free legal document template. Based on National Land Code 1965 (Act 56)}
}Frequently Asked Questions
A subsale SPA and a primary market SPA differ in the party selling the property and the legal framework that applies. A primary market SPA involves a licensed housing developer under the Housing Development (Control and Licensing) Act 1966 (HDA 1966) selling new residential units, and the SPA form is statutorily prescribed as Schedule G (strata) or Schedule H (landed) — the developer cannot deviate from these prescribed forms. A subsale SPA involves a private owner — individual, company, or financial institution — selling a completed property in the secondary market, and is governed by the Contracts Act 1950 and NLC 1965. The statutory protections available to homebuyers under the HDA 1966 — such as the 24/36-month VP guarantee, 10% per annum LAD for late VP, the defect liability period, and the Housing Development Account — do not apply to subsale SPAs. Subsale SPA terms are negotiated between the parties and their solicitors, typically using the Bar Council Malaysia's standard form as a starting point.
A standard subsale property transaction in Malaysia typically takes 3 to 6 months to complete from the date of the SPA to the registration of the transfer at the land registry. The contractual completion period is typically 90 days from the date of the SPA, within which the purchaser must pay the balance purchase price. If the purchaser's bank end-financing is involved, the bank's legal documentation and release of loan proceeds may take 4 to 8 weeks. The Pejabat Tanah dan Galian (land registry) registration of the Memorandum of Transfer can take a further 3 to 8 weeks depending on the state — Selangor's registration period is typically shorter than Penang or Johor. Where the vendor has an existing bank charge to discharge, the time required to obtain the discharge of charge from the vendor's bank adds further to the overall timeline. Total end-to-end from SPA signing to registration of transfer in the purchaser's name typically runs 4 to 6 months.
Under Section 21B of the Real Property Gains Tax Act 1976 (RPGT Act 1976), in every disposal of real property in Malaysia, the purchaser is required to retain 3% of the total value of the consideration (purchase price) from the balance payable to the vendor and remit it to the Inland Revenue Board of Malaysia (LHDN) within 60 days from the date of disposal (i.e., the date of the SPA). This 3% retention applies to all subsale transactions unless the vendor provides evidence that RPGT exemption applies — for example, for Malaysian citizens and permanent residents disposing of property in the 6th year or beyond of ownership (0% RPGT rate). LHDN then assesses the vendor's actual RPGT liability and refunds any excess of the 3% retention over the tax assessed. A purchaser who fails to remit the 3% withholding is personally liable for the tax under Section 21B.
Before signing a subsale SPA in Malaysia, the purchaser's solicitor should conduct the following property searches to verify the vendor's title and identify any encumbrances. A title search (carian rasmi) at the Pejabat Tanah dan Galian confirms the registered owner, the title type (Geran, Pajakan, or Hakmilik Strata), any registered charges (bank charges), and any restrictions in interest or conditions endorsed on the title. A bankruptcy search (carian kebankrapan) at the Department of Insolvency Malaysia (MDI) confirms that the vendor is not an undischarged bankrupt, as a bankrupt cannot dispose of property without the Director General of Insolvency's consent under Section 38 of the Insolvency Act 1967 (Act 360). A company search (carian SSM) at the Companies Commission of Malaysia confirms that a corporate vendor is not in the process of winding up under the Companies Act 2016. For strata properties, a search with the MC or JMB confirms the outstanding maintenance charges and any levies on the parcel.
Yes, a subsale SPA in Malaysia can include a condition precedent (syarat terdahulu) making the SPA conditional on the purchaser obtaining end-financing (a housing loan) from a financial institution regulated by Bank Negara Malaysia within a specified period — typically 21 to 30 days from the date of the SPA. If the purchaser is unable to obtain a loan approval within the specified period despite making genuine efforts, the loan failure clause entitles the purchaser to rescind the SPA and recover all monies paid, less an administrative fee. This clause protects the purchaser from being bound by a SPA and losing the deposit if bank financing cannot be secured. The loan failure condition must be expressly negotiated and inserted into the subsale SPA — it is not an automatic implied term under the Contracts Act 1950. If no loan condition is included, the purchaser bears the full risk of financing falling through.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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