Stamp duty exemption for transfer of property between parent and child and grandparent and grandchild gazetted
15 June 2023
The
Stamp Duty (Exemption) (No. 3) Order 2023 [P.U.(A) 178/2023] (“
E.O. 3/23”) was gazetted on 9 June 2023. It is deemed to have come into operation on
1 April 2023.
E.O. 3/23 provides that an instrument of transfer of any immoveable property operating as a voluntary disposition
inter vivos from the donor to the recipient specified in Table A below shall in respect of:
- the first RM1,000,000 or less of the market value of the property be exempted from stamp duty; and
- any amount exceeding RM1,000,000 of the market value of the property shall be chargeable with 50% of the stamp duty under item 32(a) of the First Schedule to the Stamp Act 1949.1
The transfers that are eligible for the stamp duty exemption under E.O. 3/2023 are as follows:
| Table A |
| Donor |
Recipient |
| Mother and/or father |
Child |
| Child |
Mother and/or father |
| Grandfather and/or grandmother |
Grandchild |
| Grandchild |
Grandfather and/or grandmother |
The exemption of stamp duty under E.O. 3/2023 shall only apply if:
- the instrument of transfer of the immoveable property is executed on or after 1 April 2023; and
- the recipient is a Malaysian citizen.
Prior to 1 April 2023, the
Stamp Duty (Remission) (No. 2) Order 2019 [P.U.(A) 369/2019] (‘
R.O. 2/2019’) remits 50% of the stamp duty chargeable on any instrument of transfer of any immoveable property operating as a voluntary disposition
inter vivos from the donor to the recipient specified in Table B below:
| Table B |
| Donor |
Recipient |
| Mother and/or father |
Child |
| Child |
Mother and/or father |
As in the case of R.O. 2/2019, a ‘child’ for the purposes of E.O. 3/2023 means a legitimate child, step child or child adopted in accordance with any law.
E.O. 3/2023 gives effect to one of the initiatives announced by the Minister of Finance in the Malaysian Budget 2023 Speech.
2 E.O. 3/2023 is welcomed as it not only extends the categories of transfers that are eligible for stamp duty exemption, but also grants full exemption from stamp duty for the first RM1,000,000 of the market value of the property being transferred.
Alert by Jesy Ooi (Partner) of the Real Estate Practice of Skrine.
1 Item 32(a) of the First Schedule to the Stamp Act 1949 provides that the stamp duty payable on an instrument of transfer of property is: (i) 1% on the first RM100,000; (ii) 2% on any amount exceeding RM100,000 but not exceeding RM500,000; (iii) 3% on any amount exceeding RM500,000 but not exceeding RM1,000,000; and 4% on any amount exceeding RM1,000,000, of the consideration or market value of the property, whichever is greater.
2 See Appendix 8 of the Malaysian Budget 2023 Speech.
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. For further information, kindly contact skrine@skrine.com.