Stamp Duty When Buying A House 2023

Buying a house has been unequivocally one of the hottest topics that being discussed by Malaysian. Most Malaysian are hopeful to at least own a house one day.

But, how many of us know the process of buying a house? To be honest, it can be a long process to discuss and write. So, it’s will be wise to discuss one part at a time.

On that note, today we’re going to share about Stamp Duty When Buying A House.

I was intrigued to write this because we received a call from one of our clients that is totally lost about this issue – Stamp Duty When Buying A House. So, we thought this might be a good share to all of us, especially for new house buyers.

So, one of the questions asked was, How many stamp duty we have to pay?

It’s very important to know the parties you’re buying from before we’re going in the questions.

Here there are three usual parties that commonly people will buy a house.
1. Buying a house from Property Agent or Seller
You will be required to execute a Sale and Purchase Agreement (SPA) when buying from property agent or seller directly,
Purchaser will usually require to forward the lawyer legal fees with Stamp Duty fees to the SPA Lawyer. This is for the House Purchase Stamp Duty. Everyone is obligated to make a Stamp Duty Payment when buying a house in Malaysia.
However, if you’re a first-time house buyer, you are in for a treat! You’ll receive an exemption on the stamp duty up to RM5000. We’re going to talk more about this at the end of the article.

2. Buying a house during Auction
Buying an Auction House can be tricky, but if you’re doing it right, you might find some hidden “treasure” in it. Auction property will require an execution of Proclamation of Sale which replacing the Sale and Purchase Agreement. After signing the Proclamation of Sale, a Purchaser still require to appoint a lawyer to complete the whole buying process. At this point, same with buying a house from property agent or seller, the Purchaser will need to pay for the House Purchase Stamp Duty.

3. Buying a house from Developer
Buying a house from Developer can be slightly different from the earlier two. You’ll still require to execute a Sale and Purchase Agreement (SPA). However, you are not required to pay the House Purchase Stamp Duty at this point.
You’ll only pay for the House Purchase Stamp Duty when the property completed and once the sub-division of your property title. That can take a long time, probably around 5-6 years after signing the SPA.This is why buying a house from the developer can be a popular option.
Tips: There is exceptions project that the property title had sub-divide when developer sell the house to a Purchaser. If this happens, you’ll have to pay the House Purchase Stamp Duty during the signing of SPA.

Now, you understand that buying a house required a Stamp Duty Payment.

Next question is, How Much is House Purchase Stamp Duty?

2023 STAMP DUTY SCALE

Stamp duty Fee 1% : For First RM100,000

Stamp duty Fee 2% : RM100,001 To RM500,000

Stamp duty Fee 3% : RM500,001 and RM1,000,000

Stamp duty Fee 4% : >RM1,000,000

If you’re First-Time House Buyer, there will be Exemption amount on the House Purchase Stamp Duty.

The Criteria For First-Time House Buyer Stamp Duty Waiver:
1. Must be first-time house buyer. Never buy a house before and never inherited any property.
2. The Property Price must be less than RM500,000.
3. Stamp duty exemption is capped at RM500,000 on the property market value and loan amount.

For Example:
If you’re buying a house with a Price of RM500,000.
The House Purchase Stamp Duty is as follows,
First RM100,000 : 1% x RM100,000 =RM1000
RM100,001 To RM500,000 :2% x RM400,000= RM8000
Total Exempted Stamp Duty for RM500,000 : RM9000

Okay, we have clear all the air for House Purchase Stamp Duty, just everything you need to know.

Next step will depend whether are you going to apply for a bank loan to finance the balance purchase price?

If you’re not taking any bank loan, then you’re not required to pay anymore Stamp Duty, just the House Purchase Stamp Duty.

However, if you do need a loan like most of us, then there will be Loan Agreement Stamp Duty involve.

How much is the Loan Agreement Stamp Duty?
The Loan Agreement Stamp Duty is a flat rate of 0.50% from the Total Loan Amount.

For Example,
If the loan amount is RM500,000.
The Loan Agreement Stamp Duty will be RM500,000 x 0.50% = RM2500.00
And if you’re first-time house buyer, this RM2500 will be exempted. Meaning, you’ll pay Zilch! ZERO!

Conclusion:
1. There are two Stamp Duty when Buying A House in Malaysia.
a. Stamp Duty when buying a house.
b. Stamp Duty on Loan Agreement when you’re taking a loan with the bank.
2. First-time House Buyer can get Stamp Duties exemption for house purchase and bank loan agreement.

So, we hope with this article – Stamp Duty When Buying A House will help you in making that decision when buying a house.