Following on our last publication, this article aims to explain the stamp duty exemption provided by the Malaysian Government, to first time house purchasers, who purchase a sub-sale property. As part of the bid to stimulate the housing sector and help Malaysians purchase their own first home, the Government has begun a campaign for exemption on paying stamp duty for a first home between 01.01.2021 to 31.12.2025. We will explain the eligibility criteria and the benefits of this campaign below.
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What is the benefit of the campaign?
The campaign provides an exemption on stamp duty payable on homes whose market value (not purchase price) is up to RM 500,000.00.
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What does that actually mean?
Well, prior to the campaign, a purchaser would be subject to 1% stamp duty on the first RM 100,000.00 and 2% for the next RM400,000.00.
For example, if your new home was valued at RM 500,000.00 then the stamp duty would be:
For 1st RM100,000.00 x 1% RM1,000.00
For next RM400,000.00 x 2% RM 8,000.00
Therefore, the stamp duty payable is RM 9,000.00 [1]
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Under this campaign, RM 9,000.00 would be exempted.
The exemption further applies to loans obtained in relation to the purchase of the home. Where previously the loan agreement/ loan facility would be subject to a stamp duty, this duty is also waived. However, this does not apply on subsidiary loans documents.
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How does a Purchaser become Eligible?
This exemption applies ONLY to the purchasers of residential property (houses, condominiums etc.) who never owned a residential property including property received via inheritance, gift either own individually or jointly with another person.
To ensure there is no fraudulent activity by the Purchaser, in order to get the exemption, the Purchaser would need to affirm an affidavit (a sworn statement overseen by a Commissioner for Oaths).
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Important Notes to Remember
This Campaign is an excellent incentive for potential home owners to enter the property market. In addition, if you have already paid your stamp duty on your recent property, if the property/purchase is eligible for the campaign, you can apply for a REFUND of the stamp duty paid provided the refund application is made within 12 months from the documents date.
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Finally, we wish to make aware that third parties are not exempted from stamp duty on obtaining a loan. It only applies to the purchaser. For example, if one partner in a marriage registered their name as the purchaser but both parties applied for a joint loan, the partner who registered as purchaser would be exempted from stamp duty on principal loan document. The other partner would have to pay stamp duty on the loan.
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If you have any questions on the above, or would like to know more about the stamp duty exemptions for sub-sale properties, please do not hesitate to contact our conveyancing team at asa@adhaselvi.com.my or get in touch with us on 03-22834696.
[1] Schedule 1, Paragraph 32 (a) Stamp Duty Act 1949