With the New Year now well underway, the government has latest Stamp duty policy has been updated for property to help Malaysian citizens make affordable investments, especially those who are buying their first home.
Before we tell you what those updates are, let’s explain
What is Stamp duty?
Basically Stamp Duty – in Malaysia – is a tax levied on a variety of documents including legal, commercial and financial documents, all of which are specified in the First Schedule of Stamp Duty Act 1949.
All transactions including sale, transfer, mortgage and loan are subjected to legal stamps through this Stamp Duty.
Stamp Duty is divided into two categories:
- Fixed Duties – Fixed charges are RM10 per unit, including stamps, policies, and stamps for every copy.
- Ad Valorem Duties – Stamp duty based on the value of the transaction on the legal documents, including the Memorandum of Transfer / Deed of Assignment, the equity of the listed company, lease, loan contract and legal documents.
Read More: Best Time To Buy Your First Home
Latest exemption for Real Estate in 2018
The government has proposed the following stamp duty exemptions for first time home-buyers:
| Value of instruments of transfer and loan agreement for the purchase of first home | Exemption given on stamp duty |
| Up To RM300,000 | 100% |
| Value of instruments of transfer and loan agreement for the purchase of first home | Exemption given on stamp duty |
| Between RM300,001 and RM500,000 | 100% on the first RM300,000 and excess is subject to the prevailing rate of stamp duty |
Note: The above mentioned exemption is applicable for sale and purchase agreement executed from 1st January 2017 to 31 December 2018
Stamp Duty Scale for 2018
| First RM100,000 | 1% Stamp Duty Fee |
| RM100,001 To RM500,000 | 2% Stamp Duty Fee |
| RM500,001 and above | 3% Stamp Duty Fee |
Now let’s try explaining how you calculate stamp duty with a few scenarios:
Scenario 1: Buying your first house with the price amounting to RM300, 000
Let’s say the Loan amount is RM270, 000 (90%)
Property Stamp duty:
Stamp duty Fee 1%: For First RM100, 000 = RM1000
Stamp duty Fee 2%: RM100, 001 To RM300, 000 = RM4000
Total Stamp Duty to be paid is: RM 5000
Total exemption amount is: RM 5000
In other words, the balance you need to pay is: RM0
Loan Stamp Duty:
RM270, 000 X 0.50% = RM1500
And since it is your first house, you are exempted a maximum of RM1500.
So your payment is: RM1500 – RM1500 = RM0
Scenario 2: Buying your first house with the price amounting to between RM300, 001 and 500, 000; let’s say 400,000
Let’s say the Loan amount is RM360, 000 (90%)
Property Stamp duty:
Stamp duty Fee 1%: For First RM100, 000 = RM1000
Stamp duty Fee 2%: RM100, 001 To RM500, 000 = RM6000
Total Stamp Duty to be paid is: RM 7000
Total exemption amount is: RM 5000
In other words, the balance you need to pay is: RM 7000 – RM 5000 = RM 2000
Loan Stamp Duty:
RM360, 000 X 0.50% = RM1800
Again since it is your first house, you are exempted a maximum of RM1500.
So your payment is: RM1800 – RM1500 = RM300
Scenario 3: Buying your first house with the price amounting to above 500,001, let’s say 600,000
Let’s say the Loan amount is RM540, 000 (90%)
Property Stamp duty:
Stamp duty Fee 1%: For First RM100, 000 = RM1000
Stamp duty Fee 2%: RM100, 001 To RM500, 000 = RM8000
Stamp duty Fee 3%: above RM500, 000 = RM3000
Total Stamp Duty to be paid is: RM 12000
Total exemption amount is: RM 5000
In other words, the balance you need to pay is: RM 12000 – RM 5000 = RM 7000
Loan Stamp Duty:
RM540, 000 X 0.50% = RM2700
Again since it is your first house, you are exempted a maximum of RM1500.
So your payment is: RM2700 – RM1500 = RM1200
Hopefully you now have a better grasp of the latest update of stamp duty and how the updated stamp duty has changed things for first time property buyers in Malaysia.
Looking to find out more about stamp duty and how it affects the price of a property? Talk to us, send us a message at
hello@iqiglobal.com or call us at 012-299-6155 or 037-450-6655.
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