Valuation Fee for Home Loan in Malaysia: Who Pays, How Much, and Can You Negotiate?

The valuation fee for a home loan in Malaysia is typically paid by the buyer, and it is calculated using a regulated scale set by LPEPH (formerly BOVAEA). For most residential properties priced under RM500,000, expect to pay between RM400 and RM900. Read on for the full fee table, the subsale vs. new-launch difference, and practical tips on when this cost is waived or negotiable.

Why does a bank require a property valuation?

Before approving your home loan, the bank needs to confirm the property’s market value. This protects the lender: it ensures the loan amount does not exceed what the property is actually worth. The bank appoints a licensed valuer from its approved panel to produce a formal valuation report. You, the borrower, foot the bill.

This applies specifically to subsale (secondary market) transactions and to refinancing. For new launches bought directly from a developer, the valuation situation is different, as explained below.

Who pays the valuation fee?

The borrower pays. Even though the bank appoints the valuer and uses the report to protect its own interest, the fee is passed directly to you. You will typically see it billed alongside other upfront costs, such as legal fees and stamp duty, before or at loan disbursement.

The BOVAEA/LPEPH scale fee explained

Valuation fees are not freely set by individual firms. They are governed by the Seventh Schedule (Rule 48) of the Valuers, Appraisers, Estate Agents and Property Managers Rules 1986, administered by LPEPH. The scale is based on the property’s market value, not the transaction price or loan amount.

Current scale fee table

Property Market Value	Fee Rate
First RM100,000	0.25%
Next RM1,900,000 (up to RM2 million)	0.20%
Next RM5,000,000 (up to RM7 million)	0.167%
Next RM8,000,000 (up to RM15 million)	0.125%
Next RM15,000,000 (up to RM30 million)	0.10%
Remainder above RM30 million	0.067%

Minimum fee: RM400 per property (most residential valuations hit this floor).

Source: LPEPH Seventh Schedule, Valuers, Appraisers, Estate Agents and Property Managers Rules 1986.

Worked examples

Example 1: RM350,000 subsale apartment

First RM100,000 at 0.25% = RM250
Next RM250,000 at 0.20% = RM500
Total = RM750 (above the RM400 minimum, so RM750 applies)

Example 2: RM650,000 terraced house

First RM100,000 at 0.25% = RM250
Next RM550,000 at 0.20% = RM1,100
Total = RM1,350

Example 3: RM1,200,000 semi-detached home

First RM100,000 at 0.25% = RM250
Next RM1,100,000 at 0.20% = RM2,200
Total = RM2,450

For most buyers in the RM300,000 to RM800,000 range, the valuation fee will fall between RM700 and RM1,600.

Subsale vs. new launch: a key difference

Subsale (secondary market)

Valuation is almost always required. The bank needs an independent assessment because there is no developer-set price list to rely on. You will pay the full scale fee or a panel rate, whichever your bank’s appointed valuer charges.

New launch (direct from developer)

For properties under a sale and purchase agreement (SPA) signed directly with a licensed developer under the Housing Development (Control and Licensing) Act 1966, many banks accept the developer’s own in-house valuation or the SPA price as sufficient evidence of market value during initial loan processing. A formal valuation report may not be required, and the fee is therefore waived for that stage.

However, at full loan disbursement, some banks do commission a panel valuer to do a final check. Ask your bank explicitly whether a valuation report will be needed and at what stage.

Refinancing

If you are refinancing an existing property, a fresh valuation is required and the cost follows the same BOVAEA scale.

Do banks use their own panel valuers?

Yes. Every licensed bank in Malaysia maintains a list of approved valuation firms. You cannot engage a random valuer and expect the bank to accept the report. The bank will instruct you on which firm to engage, or it will arrange the appointment directly and bill you.

Because banks send large volumes of work to panel valuers, they sometimes negotiate bulk rates. In practice, a residential valuation under RM500,000 may cost only RM400 to RM500 even where the full scale calculation exceeds that, because the panel firm invoices at the scale minimum. Do not assume you are being overcharged if the invoice is close to RM400.

Can you negotiate the valuation fee?

Strictly speaking, the BOVAEA scale fee is a regulated minimum. A valuer cannot legally charge less than the scale amount. However, a few practical points apply.

Banks absorb the fee as a promotion. During competitive lending campaigns, banks occasionally offer to waive or reimburse the valuation fee as part of a home loan package. This is a bank marketing decision, not a fee reduction by the valuer.
Developer absorption for new launches. Some developers build the valuation cost into their rebates or legal subsidy packages for new projects. The fee is still incurred, but someone else pays it.
Update valuations cost less. If a valuation was done within the past year and you need a fresh one (for example, when switching banks), an update valuation fee is at least 15% of the full scale fee or RM400, whichever is higher. A revaluation (within two to three years) carries a minimum of 30% of the scale fee or RM400. This matters for refinancers.
You can ask, but the answer may be no. If you are comparing loan offers from two banks and one requires a panel valuer while another will accept an existing report, factor that into your cost comparison.

Other costs to budget alongside the valuation fee

The valuation fee is one of several upfront costs in a Malaysian property purchase. See our full guide to property purchase costs in Malaysia for the complete picture.

For a quick reference alongside valuation, here are the other common upfront costs:

Cost Item	Who Pays	Approximate Amount
Valuation fee	Buyer	RM400 to RM2,500+ (scale based)
Legal fee (SPA)	Buyer	Scale fee, typically RM1,500 to RM4,000
Stamp duty on SPA	Buyer	1% to 4% of property price
Loan agreement legal fee	Buyer	Scale fee on loan amount
Stamp duty on loan	Buyer	0.5% of loan amount
MRTA/MLTA premium	Buyer	Varies by age and loan amount

For more on stamp duty rates, see our guide on stamp duty for property in Malaysia.

Key takeaways

The valuation fee is paid by the borrower, not the bank.
Fees follow the regulated LPEPH scale, starting at 0.25% for the first RM100,000 and stepping down. The minimum is RM400.
For a typical RM400,000 to RM700,000 subsale property, budget RM800 to RM1,200 for the valuation.
New launches direct from licensed developers often do not require a separate valuation report at the application stage, effectively waiving the fee.
Banks may absorb the fee during promotional campaigns. Always ask when comparing loan packages.
You cannot legally negotiate below the LPEPH scale minimum, but banks and developers can subsidise it on their end.
Update and revaluation fees (for refinancing) are lower than full valuations: a minimum of RM400 or a percentage of the scale, whichever is higher.

Frequently asked questions

Q: Is the valuation fee included in my home loan amount?

No. The valuation fee is an out-of-pocket upfront cost. Banks do not typically roll this fee into the loan principal. You must pay it before or at the time of loan disbursement.

Q: What if the bank’s valuation comes in lower than the agreed purchase price?

This is called a valuation shortfall or “low valuation.” The bank will only lend against the lower valuation figure. You will need to cover the gap with your own cash or renegotiate the purchase price with the seller. This is a common risk in hot subsale markets.

Q: Do I need to pay for a valuation if I am buying a new launch from a developer?

In most cases, no. Banks generally accept the SPA price for new launches under the Housing Development (Control and Licensing) Act as evidence of value. Some banks may still commission a valuation at disbursement stage. Confirm with your bank before signing the loan offer.

Q: Can I choose my own valuer instead of the bank’s panel?

No. The bank will only accept a valuation report from firms on its approved panel. Using an outside valuer will result in the report being rejected.

Q: Is the valuation fee tax-deductible?

For residential owner-occupied purchases, no. For investment properties where rental income is declared, the valuation fee may qualify as an allowable deduction against rental income under the Income Tax Act 1967. Consult a tax professional or refer to LHDN guidelines for your specific situation.

This article is for educational purposes. Fee scales and bank policies may change. Always verify current rates with your bank, your appointed valuer, and LPEPH before making financial decisions.

Educational content only, not financial advice. Verify current figures with official sources.