Stamp Duty Exemptions for Transfers and Loan Agreements for Residential Properties Purchased under the Home Ownership Campaign 2021
14 July 2021
Since 2019, the Malaysian Government has introduced various stamp duty exemptions as an initiative to stimulate the housing sector. Recently, the following Orders were gazetted under the Stamp Act 1949 in relation to the Home Ownership Campaign 2021 (‘
HOC 2021’) and are deemed to have come into operation on
1 June 2021.
Stamp Duty (Exemption) (No.4) Order 2021 (‘
E.O. 4/21’) exempts from stamp duty in respect of any loan agreement to finance the purchase of a residential property under the HOC 2021, which is valued at more than RM300,000 but not more than RM2.5 million, and is executed between an individual and any of the financial institutions listed in sub-paragraphs (1)(a) to (1)(i) of Paragraph 2 of E.O. 4/21.
Stamp Duty (Exemption) (No.5) Order 2021 (‘
E.O. 5/21’) provides that any instrument of transfer for the purchase of a residential property under the HOC 2021, which is valued at more than RM300,000 but not more than RM2.5 million, and is executed by an individual is exempted from stamp duty in respect of the first RM1.0 million and below of the value of the residential property.
The exemptions under E.O. 4/21 and E.O. 5/21 shall only be granted if –
- the sale and purchase agreement for the purchase of the residential property (‘SPA’) is executed on or after 1 June 2021 but not later than 31 December 2021 and is stamped at any branch of the Inland Revenue Board Malaysia;
- the SPA is between an individual and a property developer; and
- the purchase price in the SPA is a price after a discount of at least 10% by the property developer, except where the residential property is subject to controlled pricing.
In addition, for the purposes of E.O. 5/21 -
- the value of the residential property shall be based on the market value; and
- stamp duty of RM3 is charged for every RM100 of the balance amount of the value of the residential property which is in excess of RM1.0 million.
The application for exemptions under both E.O. 4/21 and E.O.5/21 must be accompanied by a HOC 2021 Certification issued by the Real Estate and Housing Developers’ Association (REHDA) Malaysia, Sabah Housing and Real Estate Developers’ Association (SHAREDA) or Sarawak Housing and Real Estate Developers’ Association (SHEDA).
For the purposes of both E.O. 4/21 and E.O.5/21 -
- ‘residential property’ means a house, condominium unit, an apartment or a flat purchased or obtained solely to be used as a dwelling house and includes a service apartment and small office home office (SOHO) for which the property developer has obtained an approval for a Developer’s Licence and Advertising and Sales Permit under the Housing Development (Control and Licensing) Act 1966, the Housing Development (Control and Licensing) Enactment 1978 of Sabah or Housing Development (Control and Licensing) Ordinance 2013 of Sarawak;
- ‘individual’ means a purchaser who is Malaysian citizen or co-purchasers who are Malaysian citizens; and
- ‘property developer’ means a property developer registered under REHDA, SHAREDA or SHEDA.
Based on a reading of E.O. 4/21 and E.O.5/21, it appears that the exemptions granted under those instruments are not restricted to first time purchasers of residential property.
Alert prepared by Jesy Ooi (Partner) and Seen Qin Ying (Associate) of the Real Estate Practice of Skrine
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such.