Step 3: Maintenance Fees, Sinking Funds, and Taxes
Once you receive your property’s Vacant Possession (VP), it’s important to settle any outstanding payments, including the final 5% of the purchase price. If you’ve purchased a strata property, there are additional payments to be aware of:

Maintenance Fees: Ensuring Common Areas Remain Functional
As an owner, you’ll contribute to the upkeep of shared facilities and spaces. These fees are used for maintaining:
Common areas: Corridors, lobbies, and staircases
Amenities: Clubhouses, swimming pools, and gyms
Security: Guardhouses and security guards
Landscaping: Gardens and other green spaces
For example, if the maintenance fee is RM0.35 per square foot and your unit is 1,000 sq. ft., your monthly contribution would be RM350.
Sinking Fund: Preparing for Major Repairs and Upgrades
The sinking fund is a reserve for significant expenses such as:
Repainting the building exterior
Replacing aging fixtures, fittings, or equipment
Renovating common areas or upgrading facilities
This fund is typically collected as a one-time payment upon VP and later as a percentage of your monthly maintenance fees.
Taxes to Consider: Quit Rent, Assessment, and Beyond
Quit Rent
A minimal annual land tax payable to the state government. It’s calculated based on the land area and type of property.
Assessment Tax
A twice-yearly tax used to fund local council services like waste collection and public amenities. The rate varies by property value and location.
Rental Income Tax
If your property is an investment, you must declare rental income when filing taxes. The tax rate ranges from 0% to 30% based on a progressive system. For instance:
Rental income of RM24,000/year may fall under a 10%-15% tax rate after allowable deductions.
Real Property Gains Tax (RPGT)
If you sell your property within five years of the Sale and Purchase Agreement (SPA) date, a 15% RPGT applies. After five years, the rate decreases, with exemptions for certain cases (e.g., selling to immediate family members).
Key Tips for Property Buyers
Review Your SPA: Ensure all fees are accounted for to avoid delays in taking possession.
Plan Your Finances: Account for recurring costs like maintenance fees and taxes in your budget.
Consult Experts: Seek advice from a lawyer or tax consultant to navigate legal and financial obligations effectively.