Exemption of Stamp Duty on Purchase and Financing of First Residential Property
11 February 2021
The following Orders were gazetted under the Stamp Act 1949 on 10 February 2021 to exempt the stamp duty payable on an instrument of transfer and a loan agreement relating to the purchase of a residential property by a first time home buyer. The Orders are deemed to have come into operation on 1 January 2021.
Stamp Duty (Exemption) Order 2021
This Order exempts from stamp duty any instrument of transfer executed in relation to the purchase of one unit of residential property having a market value not exceeding RM500,000.00 by an individual, subject to the following conditions being fulfilled –
- the sale and purchase agreement for the purchase of the property is executed on or after 1 January 2021 but not later than 31 December 2025;
- the individual has never owned any residential property including one which is obtained by inheritance or gift, whether held individually or jointly; and
- the application for exemption is supported by a statutory declaration by the individual confirming the matters referred to in paragraph (2) above.
Stamp Duty (Exemption) (No. 2) Order 2021
This Order exempts from stamp duty any loan agreement to finance the purchase of one unit of residential property having a value not exceeding RM500,000.00, subject to the following conditions being fulfilled –
- the loan agreement is executed by the individual named in the sale and purchase agreement and any of the following –
- a licensed bank under the Financial Services Act 2013;
- a licensed bank under the Islamic Financial Services Act 2013;
- a development financial institution prescribed under the Development Financial Institutions Act 2002;
- a licensed insurer under the Financial Services Act 2013;
- a licensed takaful operator under the Islamic Financial Services Act 2013;
- a co-operative society registered under the Co-operative Societies Act 1993;
- an employer who provides an employee housing loan scheme;
- the Borneo Housing Mortgage Finance Berhad (Company No. 25457-V); and
- the Mutiara Mortgage and Credit Sdn Bhd (Company No. 257663-T);
- the sale and purchase agreement for the purchase of the property is executed on or after 1 January 2021 but not later than 31 December 2025;
- the individual has never owned any residential property including one which is obtained by inheritance or gift, whether held individually or jointly; and
- the application for exemption is supported by a statutory declaration by the individual named in the sale and purchase agreement confirming the matters referred to in paragraph (3) above.
For the purposes of both Orders -
- ‘residential property’ means a house, a condominium unit, an apartment or a flat purchased or obtained solely to be used as a dwelling house; and
- ‘individual’ means a purchaser or co-purchaser of a residential property who is a Malaysian citizen.
Comments
The exemptions from stamp duty under the above-referred Orders were announced by the Finance Minister during the 2021 Malaysian Budget Speech. These are not new initiatives but enhancements of similar exemptions that had expired on 31 December 2020. The previous exemptions applied where the residential property has a market value not exceeding RM300,000.00 but the current Orders increase this threshold to RM500,000.00.
Alert by Kok Chee Kheong (Partner) in the Corporate Practice of Skrine