Late Payment Interest on Property in Malaysia: Instalments, Home Loans, Maintenance Fees and Property Taxes

Once you own property in Malaysia, several payments fall due on a schedule: the developer’s progress instalments, your loan instalments, maintenance fees, quit rent and assessment tax. What happens when each is paid late is written into law or into your contract. It is not left to anyone’s discretion.

Late payment charges at a glance

Late developer instalments

Under clause 10(1) of both Schedule G and Schedule H, you have 30 days after the developer’s notice that a stage is complete. After that, a late payment charge runs on the unpaid instalment at 10% a year, calculated day to day.

Illustration: a RM50,000 instalment paid 20 days late → RM50,000 × 10% × 20 ÷ 365 ≈ RM273.97.

The developer may not charge late interest if its progress notice was incomplete, or if the land is charged to a bank that is slow to issue the redemption statement and undertaking your financier needs before releasing funds (clause 10(2)). Buyers financed by a government housing loan are not charged late interest for the first 6 months after signing (clause 10(3)).

Can the developer cancel the purchase?

Yes, but only after at least 30 days’ written notice by A.R. registered post (clause 11(2)). If you pay the arrears and late charges within that notice, the agreement stands. It also stands if, within the notice, you obtain loan approval, pay the difference and hand over your financier’s undertaking (clause 11(3)).

If it is terminated under Schedule H, the amount forfeited depends on how much you have paid: 10% of the price if you have paid up to 50%, or 20% of the price if you have paid more than 50%, with the balance refunded (clause 11(1)). Under Schedule G the forfeiture is 10%.

Late home loan instalments

Hong Leong Bank, for example, charges 1% a year on the amount in arrears on a conventional home loan, and 1% a year on the overdue instalment on Islamic home financing. Maybank’s mortgage disclosure sheet also states a 1% a year late payment penalty. Bank Negara’s fees guidelines cap this kind of late charge at 1% a year.

Illustration: a RM2,000 instalment paid 30 days late → RM2,000 × 1% × 30 ÷ 365 ≈ RM1.64.

Persistent arrears cost more. Hong Leong Bank states that from 2 January 2025 an account overdue by more than 31 days for the third time in 12 months pays an extra 1.5% a year, and one overdue by 100 days pays an extra 2.5%. Check your own letter of offer and disclosure sheet for your bank’s terms.

Late maintenance fees

Charges are due within 14 days of a notice. During the developer’s management period, late payment carries interest at 10% a year, charged daily. Once a Joint Management Body (JMB) takes over, it sets the rate, up to 10% a year. A JMB can recover persistent arrears with a written demand of at least 14 days and then a warrant to seize the owner’s movable property (Strata Management Act 2013, s.12, 25, 34 and 35). See our guide to maintenance fees and the sinking fund.

Late quit rent and assessment tax

Quit rent (Johor): due 1 January to 31 May each year. Paid after 31 May, it attracts a penalty of 20% of the arrears, minimum RM10. If still unpaid, the land office issues a Form 6A notice (RM20); if unpaid within 3 months of that notice, the land can be forfeited, and redeeming it carries a penalty of up to six times the arrears.

Assessment tax (Johor Bahru City Council): paid in two halves, 1 January to 28 February and 1 July to 31 August. Late payers first receive a reminder letter (RM6, payable within 15 days), then a Form E notice (RM11, 15 days), then seizure of movable property in the building (Form G, RM33). The council states that not receiving a bill is no ground for waiving the penalty.

Related

• Progressive billing: the Schedule H payment stages
• Maintenance fee and sinking fund in Malaysia
• Tenancy agreement stamp duty in Malaysia

Sources

1. Housing Development (Control and Licensing) (Amendment) Regulations 2015, P.U.(A) 106/2015 (National Housing Department): clauses 10 and 11 of Schedules G and H. Document
2. Hong Leong Bank, fees and charges for retail loans: late payment charges and additional rates from 2 January 2025. Page
3. Maybank mortgage Product Disclosure Sheet (25 November 2025): 1% a year late payment penalty. Document
4. Bank Negara Malaysia, Policy Document on Personal Financing (30 September 2025), paras 11.9 and 11.12, citing the 1% a year cap in para 5.9.1 of the fees guidelines. Document
5. Strata Management Act 2013 (Act 757), ss.12, 25, 34 and 35 (copy hosted by Perbadanan Putrajaya). Document
6. Johor Land and Mines Office, Hasil Hub: quit rent period, 20% late penalty, Form 6A, forfeiture and redemption penalty. Page
7. Majlis Bandaraya Johor Bahru, assessment tax page (updated 24 September 2026). Page
8. Inland Revenue Board of Malaysia: stamp duty penalties (from 1 January 2025). Page

Loan terms vary by bank; your letter of offer and disclosure sheet govern. Quit rent and assessment tax figures are for Johor and Johor Bahru; other states and councils publish their own. Last verified: 11 October 2026.