A few weeks ago, we have a client that going through a divorce and need to transfer their existing property to one of the spouses.

So, we’re going to talk about the divorce topic today.

I believe, no couple wants to go through a divorce.

But, if the divorce is going to make two unhappy people become happy again then, it’s might be the best for them.

Divorce with kids, it makes things more complicated.

Personally, I think.
If two unhappy people fighting every single day, in front of the kids, and sometimes involving throwing sharp things and punching each other, and at times using foul language, this can be very unsettling for a kid.
It’s a very unhealthy environment.

Maybe divorce is the best thing.
I don’t understand this when I was a kid but I get it as I grew up.

My parents divorced when I was eight years old. So, not only I understand this, I lived through it every single day without one of my parents.

During those times, my parents have one low cost flat and a car. My father gets the house because it’s under his name and my mom gets the car because that’s under her name.

Nothing complicated in arranging the asset.
But, not for my client.

For my client, the property is under their both names.
One agreed to let go to another, without involving any money transaction.

So, they come to us for the transaction.

The first thing, we would ask is, whether they have started drafting and filling the divorce paper.

If the divorce paper hasn’t finalized, we would advise them to complete the property transaction first.
Why?

If the property transfer was done, when they are still legally husband and wife, they don’t have to pay for the stamp duty.

Because according to the stamp duty exemption order 2007, the stamp duty exemption is 100% within husband and wife.

Check out here.

In contrast, pursuant to the Stamp Duty (Exemption) (No. 10) Order 2007, the law provides for stamp duty exemption for a transfer of property between family members by way of love and affection as follows:

Transferor Transferee Exemption Rate
Husband Wife 100%
Wife Husband 100%

So, it’s only wise that the transfer is done before the divorce.

What happens when the divorced had finalized?
If the divorced had finalized, they have to pay the stamp duty for the property according to the normal procedure.

Check out the Stamp duty table below.
First RM100,000 – 1%
RM100,001 To RM500,000- 2%
RM500,001 To RM1,000,000 – 3%
>RM1,000,000 – 4% *

Therefore, it’s wise to transfer the existing property to one another before the divorce.

Just my two cents.

#malaysiahousingloan

Melissa Lee
Online Home Loan Consultant
012-6946746

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