The ultimate guide to understanding stamp duty calculation Malaysia 2023 and to get Stamp Duty Malaysia Exemption for the first time in your life.
It’s literally taken us two days to complete this article – Stamp Duty Calculation Malaysia 2023 And Stamp Duty Malaysia Exemption and researching all the material for you guys. We know this is so important to you guys and we hope you’ll find it beneficial.
On that note, we try to make it so simple for you to read, absorb, and please use it wisely.
Before we dive into the Stamp Duty Calculation & Stamp Duty Malaysia Exemption, let’s get into the core of stamp duty.
What is Stamp Duty for a house?
In Malaysia, Stamp duty is a tax levied on a variety of written instruments specifies in the First Schedule of Stamp Duty Act 1949. In general term, stamp duty will be imposed on legal, commercial, and financial instruments.
For instance, when you’re buying a house, it will appear in your Sale and Purchase Agreement (SPA) and Loan Agreement (LA).
Who pays property Stamp Duty?
It is always the home buyer (Purchaser) who pays stamp duty, not the seller.
You will pay the stamp duty to the lawyer, and your lawyer will pay it on your behalf as part of the purchase process to the stamp duty office.
When do you need to pay Stamp Duty?
Typically, you will forward your payment during the signing of the Sale and Purchase Agreement or Loan Agreement to your lawyer.
Do you pay stamp duty when buying a house?
Yes, of course, everyone does have to pay stamp duty when buying a house.
Why do you we need to pay Stamp Duty?
Stamp Duty is revenue to the state and the federal government to run or operate the state or our country. As such, the government has made it a compulsory tax-paying when buying or transferring a house in Malaysia.
How is the Stamp Duty Calculated?
When buying a house in Malaysia, everyone is required to pay for Property Stamp Duty.
Stamp Duty Calculation Malaysia 2023
The Property Stamp Duty scale is as follow.
For the first RM100,000, 1%
From RM100,001 to RM500,000, 2%
From RM500,001 to RM1mio, 3%
The subsequent amount is 4%
Stamp Duty is calculated based on the property valued by the Stamp duty Office or Sale and Purchase Agreement Price, whichever is higher.
In fact, many believe it should be based on Sale and Purchase Agreement Price. Sadly it’s not.
I know what you’re thinking.
You think that if the property valued at RM1million, you can have special arrangements with the seller to put on the Sale and Purchase Agreement based on a lower price, maybe RM800,000.
The RM200,000 difference, you’ll have another arrangement paying the seller under the table. This way, you can save on the stamp duty.
Well. Sorry to break the bubble. It’s not going to work.
You’re still required to pay RM1million stamp duty.
For instance,
If the property purchase price is RM500,000 and the property valued is RM550,000, you’ll pay RM550,000 stamp duty NOT RM500,000.
Because it based on whichever is higher between the property purchase price and property valued.
Another example,
If the property purchase price is RM400,000 and the property valued is RM350,000, you’ll pay RM400,000 stamp duty NOT RM350,000.
Because it based on whichever is higher between the property purchase price and property valued.
How much is the Stamp Duty?
Ah. We realized that even though Property Stamp Duty scale is given, but most people still not sure on the calculation.
Afraid not. We’re going to teach you today.
Example 1,
The property Purchase Price is RM500,000.
For the first RM100,000, 1% : RM100,000 x 1% = RM1000
From RM100,001 to RM500,000, 2% = RM400,000 x 2% = RM8,000
Total Stamp Duty Payable is RM9000
Example 2,
The property Purchase Price is RM1,000,000.
For the first RM100,000, 1% : RM100,000 x 1% = RM1000
From RM100,001 to RM500,000, 2% : RM400,000 x 2% = RM8,000
From RM500,001 to RM1mio, 3% : RM500,000 x 3% = RM15,000
Total Stamp Duty Payable is RM24,000
Example 3,
The property Purchase Price is RM1,500,000.
For the first RM100,000, 1% : RM100,000 x 1% : RM1000
From RM100,001 to RM500,000, 2% : RM400,000 x 2% = RM8,000
From RM500,001 to RM1mio, 3% : RM500,000 x 3% = RM15,000
The subsequent amount is 4% : RM500,000 x 4% = RM20,000
Total Stamp Duty Payable is RM44,000
How much is the stamp duty on a 300,000 house?
Stamp Duty for a house value RM300,000 is RM5000.
The property Purchase Price is RM300,000.
For the first RM100,000, 1% : RM100,000 x 1% = RM1000
From RM100,001 to RM500,000, 2% = RM200,000 x 2% = RM4,000
Total Stamp Duty Payable is RM5000
Stamp Duty Malaysia Exemption
Stamp duty exemption is when you are exempted from paying stamp duty for buying a house or transfer a property to another person.
What are the Criteria to get Stamp Duty Exemption?
There are a few Stamp Duty Exemption for the year 2023. We’re going to list out a few stamp duty exemptions.
Stamp Duty Exemption 2023 For Subsales or Under Construction Property
- Must be a first-time house buyer.
- You never own or inherited a house.
- A completed house with a residential land title. Subsales house.
- You are buying a completed house from a Property Agent, Seller, and developer.
- Or you are buying an under-construction house from a developer.
- The house must not fall under small office home office (SOHO), small office flexible office (SOFO), small office virtual office (SOVO) dan service apartment.
- Property Price/ Value must not more than RM500,000
Stamp Duty Exemption Calculation
The First Example,
- If the property Purchase Price or Property value is RM300,000, the property stamp duty will be as follows.
For the first RM100,000, 1% : RM100,000 x 1% = RM1000
From RM100,001 to RM200,000, 2% = RM200,000 x 2% = RM4,000
Total Stamp duty is RM5000.
Total Stamp Duty exemption for a first-time home buyer is RM5000.
The Second Example,
- If the property Purchase Price or Property value is RM400,000, the property stamp duty will be as follows.
For the first RM100,000, 1% : RM100,000 x 1% = RM1000
From RM100,001 to RM300,000, 2% = RM300,000 x 2% = RM6,000
Total Stamp Duty is RM7,000
Total Stamp Duty exemption for a first-time home buyer is maximum RM9000.
So, you pay RM7000-RM7000= RM0.00.
STAMP DUTY EXEMPTION FOR LOAN AGREEMENT
Besides the above exemption, if you are applying for a home loan for the above property, the loan agreement stamp duty will be exempted too.
- The loan agreement Stamp Duty is 0.50% from the loan amount.
- If the loan amount is RM500,000, the stamp duty for the loan agreement is RM500,000 x 0.50% = RM2500
- You don’t need a loan stamp duty calculator to calculate this. Just use your physical calculator.
- The exemption applies for a maximum loan amount of RM500,000.
- If the loan amount is RM400,000, the loan agreement stamp duty is RM400,000 x 0.50% = RM2000.
- The maximum stamp duty exemption for loan agreement is RM2500.
- So, you pay RM2000-RM2000 = RM0.00. for stamp duty
Okay, so we have reached the end of the article if you are interested in reading more about stamp duty.
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Melissa Lee
Online Mortgage Consultant
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