Commercial property loan in Malaysia: margin, instalment and costs

A commercial property loan in Malaysia uses the same monthly instalment formula as a home loan, but the rules around it differ. Bank margins and tenures vary more, EPF housing withdrawals generally won't help with the down payment, and the first-home stamp duty exemption doesn't apply. On a RM600,000 shop lot with an 85% loan, expect to need about RM119,000 in cash upfront before valuation and disbursements, and an instalment of about RM2,981 a month over 25 years at an illustrative 5.00%.

This guide covers what banks publish, how the sums work, and the taxes that catch first-time shop lot and office buyers.

What counts as commercial property

Banks usually mean shop lots, office lots, and some industrial property. CIMB's business premises package, for example, covers commercial and industrial property, both completed and under construction, for individual customers.

Check the category before you assume anything, because some mixed-use units are treated differently. KWSP's list of residential houses includes SOHO units and shop lots with a residential unit from a developer. So a unit that looks commercial can count as residential for EPF, and your bank or lawyer may still classify it another way. Ask both of them, using the title and SPA.

How commercial loans differ from home loans

Margin of financing. There's no single figure. These are the terms banks published when we checked on 5 November 2026:

• Alliance Bank: up to 85%, plus 5% for credit insurance and/or finance entry costs
• CIMB: up to 90%, including MRTA/MLTA, legal and valuation fees (those fees capped at 5%)
• BSN: up to 80% plus 5% for MRTT/MRTA for salaried applicants
• UOB BizProperty, a business product: advertised up to 100% of the property price including fees, while its calculator shows a maximum of 90% of the purchase price for operating companies

These are ceilings, not what you'll necessarily get. The bank decides based on the property, your income and your business.

BNM's 70% loan-to-value limit, announced in 2010, was written for a borrower's third house financing facility. The announcement doesn't mention commercial property, so don't apply that rule to a shop lot without asking the bank.

Tenure. Alliance and CIMB publish up to 30 years or age 70, whichever comes first. BSN publishes up to 20 years or age 65 upon completion. UOB's business product runs up to 30 years.

Interest rate. Rates are bank-specific and can be higher than home loan rates. BSN, for example, publishes SBR + 2.00% for loans of RM100,000 and above. Compare the rate in your letter of offer, not an advertised figure. Our guide on why bank repayments differ from calculators explains the usual gaps.

Income checks. Banks still assess your DSR, so the new instalment adds to your commitments. BSN sets a minimum income of RM5,000 for fixed earners and RM10,000 for the self-employed. Expected rental income may help, but how much of it counts is up to each bank, so don't assume all of it will.

Worked example 1: cash needed for a RM600,000 shop lot

Siti buys a RM600,000 subsale shop lot as an individual, with an 85% loan of RM510,000.

• Down payment (15%): RM90,000
• Stamp duty on the transfer: RM1,000 + RM8,000 + RM3,000 = RM12,000
• Stamp duty on the loan (0.5%): RM2,550
• Lawyer's scale fee on the SPA: RM7,250
• Lawyer's scale fee on the loan: RM6,350
• Service tax at 8% on those legal fees, if the firm charges it: RM1,088
• Total: about RM119,238, before any discount on the legal fees, valuation fee and disbursements

The stamp duty tiers are the same as those in our property stamp duty guide, and the fees use the scale in our legal fees guide. The first-home exemption covers residential homes only, so Siti gets no relief here.

Table B, the lower developer scale, applies to transactions governed by the Housing Development Act. A purely commercial unit usually falls outside that Act, so expect the full Table A scale even when buying from a developer, and confirm with your lawyer.

Worked example 2: how tenure changes the instalment

Siti's RM510,000 loan at an illustrative 5.00%:

• 20 years: RM3,365.77 a month, about RM297,786 total interest
• 25 years: RM2,981.41 a month, about RM384,423 total interest
• 30 years: RM2,737.79 a month, about RM475,605 total interest

For comparison, 25 years at an illustrative 4.20% is RM2,748.61 a month and about RM314,582 total interest. That 0.80 percentage point gap costs about RM233 a month, or nearly RM70,000 over the loan.

Age matters too. If Siti is 45, a bank with an age-65 limit allows about 20 years at most, while an age-70 limit allows 25. That's a difference of about RM384 a month on the same loan.

The formula is standard reducing balance, so you can run your own figures in the housing loan calculator by entering your commercial loan amount, rate and tenure. Ignore the home-specific costs it shows if they don't apply to your unit.

Worked example 3: does the rent cover the instalment?

Suppose Siti rents the shop out at RM3,000 a month and sets aside RM350 a month for assessment, quit rent, maintenance and insurance (both figures are illustrative).

• Rent after costs: RM2,650
• 25-year instalment: RM2,981.41
• Monthly shortfall: about RM331, before income tax on the rent and before any empty months

A shop with no tenant for six months would cost Siti about RM17,900 in instalments alone. Check that your budget can carry the loan without the rent.

The taxes that are different

Service tax on rent. Renting out residential property isn't subject to service tax, but commercial rental is a taxable service. The rate has been 6% since 1 January 2026, down from 8%. MOF set the registration threshold at RM1 million in annual rental, and tenants with annual sales of RM1 million or less are exempt from paying it. Most individual owners of one shop lot won't reach that threshold, but check with Customs if you own several units.

Real property gains tax (RPGT or CKHT). It applies when you sell at a gain, and the once-in-a-lifetime private residence exemption doesn't cover a shop lot. LHDN's current rates:

• Malaysian citizen: 30% within 3 years, 20% in the 4th year, 15% in the 5th, 0% from the 6th
• Malaysian company: same rates up to the 5th year, then 10% from the 6th
• Non-citizen, non-PR or foreign company: 30% up to the 5th year, then 10% from the 6th

Say the shop is sold in the 4th year with a RM120,000 chargeable gain. An individual gets an exemption of RM10,000 or 10% of the gain, whichever is greater, which is RM12,000 here. RPGT is RM108,000 × 20% = RM21,600. The same gain in a company pays RM120,000 × 20% = RM24,000, as that exemption is for individuals only. Hold it into the 6th year and the individual pays RM0, while the company pays RM12,000.

EPF and your down payment

KWSP's buy-house withdrawal is for a residential house, and a purely commercial unit isn't on its list. Plan the down payment and fees from cash unless KWSP confirms your unit qualifies.

Common mistakes

• Budgeting 10% down. Many published margins start at 80–85% before insurance or fees, so a 10% home loan habit leaves you short.
• Forgetting the costs. In example 1, stamp duty and legal fees add about RM29,000 on top of the down payment.
• Counting on EPF or the first-home exemption. Both are tied to residential property.
• Assuming the advertised margin applies. A figure such as 100% includes fees on a business product, and not every applicant qualifies.
• Treating rent as guaranteed. Run the numbers with a vacancy period.
• Comparing rates without the total interest. A small rate gap adds up over 25 years.

Before you apply

1. Confirm the property category in writing with the bank.
2. Ask for the margin, rate, lock-in and tenure limit for your age.
3. Get a quote from a lawyer, including disbursements.
4. Work out your DSR with the new instalment and no rental income.
5. Ask an accountant if you're choosing between buying personally and through a company.

Banks' terms change often, so treat the figures above as a starting point and rely on your letter of offer.