Budget 2008: Reduction in Stamp Duty for Title Transfer
The Malaysian 2008 budget was tabled in Parliament two weeks back with numerous goodies for those shopping for a new home. The government hopes that these new measures would help stimulate the property sector in Malaysia.
For starters, the Stamp Duty for the Land Title Transfer for properties costing less than RM250,000 has been halved. This benefit is applicable for the purchase of one house for the whole of financial year of 2008.
Property Price Stamp Stamp Duty in 2007 Stamp Duty in 2008
House A RM250,000 RM4,500 RM2,250 (-50%)
House B RM150,000 RM2,000 RM1,000 (-50%)
House C RM350,000 RM6,000 RM6,000 (unchanged)
(Based on the current rate of 1% for first RM100,000 and 2% for RM100,001 to RM1,000,000)
With this new measure, I can foresee new home buyers benefiting in 2 ways:
• Significant Stamp Duty Savings
• Encouragement to property developers to provide more properties at sub RM250,000 price tag to entice home buyers to invest.
However new home buyers please note that in the home buying process, you will incur two major Stamp Duties namely the Stamp Duty for Title Transfer and the Stamp Duty for the Bank Loan Facility Agreement.
(Refer to Key Learnings – Lawyers Lessons 2 and Lawyers Lessons 3)
The Stamp Duty for the Bank Loan Facility agreement remains unaffected by the above changes. The current prevailing rates of 0.5% of Loan amount still prevails.
Quote from The Star:
“To further stimulate the property sector in particular housing, the Government proposes that a 50% stamp duty exemption on documents of transfer be given for the purchase of one house of not more than RM250,000 per unit.”
Tags: Stamp Duty, title transfer, property, properties, Budget 2008, Malaysia, home, real estate, lawyer
Hi, Do you know when is the 50% stamp duty starts? in 2008 or from Sept 2007 onwards? cos i read somewhere that the offer is from sept 2007 till dec 2010. Thanks
I need a confirm too on the validity date as mentioned by Mike and wonder is this 50% only refer to 1st house buyer only?? My current lawyer told me this, so I am not entitle coz for my husband is second house and myself is 1st house.
Please advice. Thanks
Hi Mike and Koh,
The Stamp Duty reduction is effective only from January 1st 2008. As i understand from the Prime Minister’s speech, it is applicable for the purchase of 1 house which costs less than RM250k for the whole of 2008.
So to enjoy this exemption legally, do ensure that your SnP is signed and dated in 2008.
As for Koh, the spirit behind this is to spur growth for the property market. I believe you should be entitled to this even though it is your second house. However do get a second opinion from another lawyer.
Here’s the extract of the speech
“36. To promote the growth of the property sector, I had recently announced the exemption of real property gains tax. To further stimulate the property sector in particular housing, the Government proposes that a 50% stamp duty exemption on documents of transfer be given for the purchase of one house of not more than RM250,000 per unit. This measure will reduce the cost of purchasing a house by up to RM2,000.”
TheStar
Hi Sleeping Monster,
Thankyou for your valuable information, however, with regards to your comment to clarify the question asked, I have researched that the reduction of stamp duty officially starts from 8 September 2007 (source: http://web7.bernama.com/events/budget2008/index.php?sid=opntopstr&id=283700)
Actually I am not quite sure, but since it was announced on that website, I am pretty sure it’s accurate, and I have asked several people who told me it is effective on the date announced.
Now my real problem is, I have recently purchased a house, valued at RM180,000. The documents were signed late November, however, my lawyer now is calling me to pay RM2600 for stamp duty, when it’s supposed to be reduced to RM1300.
I have two lawyers, one for the bank, and the other for the house ( I think), and the bank’s lawyer told us that we’re entitled for the 50% reduction, however, the house lawyer is telling us that they know of no such thing. The bank’s lawyer gaved us a piece of paper stating that we are entitled for reduction, but I wish to compile more information so if this lawyer tries to be funny, we have backup.
Thanks! =)
Hi Huei,
Good job in compiling the backup documents
On top of all the articles you may also want to obtain quotations for Title transfer from different lawyers. The easiest way to get it would be to ask your bank lawyer to generate a quotation for you on the title transfer. Then, bring this quotation over to your SnP lawyer and demand a reduction. I’ll bet you he will provide you with a counter offer.