Property stamp duty can be a considerable amount to pay when buying a house. Still, you might entitle to a property stamp duty exemption; continue to read this article to find out more.

Some might see this year as a challenging year; spending on any big purchases such as houses or cars are very unlikely.

But some do see this year as an ample opportunity to make money or investment.

It depends on if you see the situation as “If the glass half-full or half-empty?”

Well, the choice is in your hand.

Anyhow, if you decide to see it as a half-full glass and grab an opportunity of buying a house or a property this year, you might want to know about the Property stamp duty.

What Is Property Stamp Duty?

Property stamp duty is a tax charged by the Malaysian government when a person or company buying a house or a property in Malaysia.

The property stamp duty applies to a Malaysian and Foreigner. Sadly, the rates for paying this property stamp duty is the same regardless of you are a Malaysian or a Foreigner.

Once a Foreigner is upset about this Property Stamp Duty, I quote the Foreigner said, “Ridiculous Amount”.

And I responded, “Absolutely. It’s absurd as the rates for a Malaysian and Foreigner is the same”. And he smiles. I smile back.

How Much Is The Property Stamp Duty?

The property stamp duty can be one of the most expensive cost you have to pay, among all other expenses.

Let’s look at the property stamp duty scales below.

PROPERTY PRICE RATES
For the first RM100,000 1%
From RM100,001 to RM500,000 2%
From RM500,001 to RM1mio 3%
The subsequent amount 4%

How To Calculate Property Stamp Duty?

Now that you know the stamp duty rates in Malaysia, let us do some calculations on the actual amount you will pay for the stamp duty.

For instance, if the Sale and Purchase Agreement is RM500,000.

So, how much is the stamp duty?

PROPERTY PRICE RATES AMOUNT
For the first RM100,000 1% RM100,000 X 1% = RM1000
From RM100,001 to RM500,000 2% RM400,000 X 2% = RM8000
TOTAL AMOUNT RM9000

In total, the payable stamp duty is RM9000.

Loan Agreement Stamp Duty

If the Purchaser requires a home loan from the bank for financing, they will need to pay Legal Fees and Stamp duty for the Loan agreement documentation.

However, the Loan agreement stamp duty is very low compare to the Property Stamp Duty.

The stamp duty for the loan agreement is as below.

LOAN AMOUNT RATES
Total loan amount 0.50%

If the loan amount is RM450,000, the stamp duty is as below.

RM450,000 x 0.50% = RM2250

How To Get Stamp Duty Exemption?

The Property stamp duty exemption is subject to a few criteria and conditions. Do check it below.

  1. The limit of stamp duty for the first residential home is up to RM500,000.
  2. Must be a Malaysian and First-time house buyer.
  3. The residential property must not fall under a small office home office (SOHO), small office flexible office (SOFO), small office virtual office (SOVO), and service apartment.
  4. Never inherit or given as a gift for any residential property before this by an individual or joint name and have never been granted any approval of stamp duty exemption application.
  5. Full Stamp Duty exemption on instruments of transfer and loan agreement for first-time homebuyers extended until 31st December 2025.
  6. This exemption is for the Sale And Purchase Agreement executed from 1st January 2021 to 31st December 2025.

Typically, The Sale and Purchase Agreement’s and Loan Agreement’s Lawyer will apply for Property and Loan stamp duty exemption.

However, you might want to remind your lawyer that the Property stamp duty exemption is not automatic. The lawyer needs to submit a physical application form to the Inland Revenue (LHDN) for processing and approval.

How Much You Save With The Stamp Duty Exemption?

Purchase Price RM500,000

Loan Amount : RM450,000

Stamp Duty For SPA

PROPERTY PRICE RATES AMOUNT
For the first RM100,000 1% RM100,000 X 1% = RM1000
From RM100,001 to RM500,000 2% RM400,000 X 2% = RM8000
TOTAL AMOUNT RM9000
After Stamp Duty Exemption RM0

Stamp Duty For Loan Agreement

LOAN AMOUNT RATES AMOUNT
RM450,000 0.50% RM450,000 X 0.5% = RM2250
TOTAL RM2250
After Stamp Duty Exemption RM0

Total save: RM9000 + RM2250= RM11,250

That concludes our article today – PROPERTY STAMP DUTY MALAYSIA

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LEGAL FEES FOR BUYING A HOUSE

See you in my next article!

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