News: Gov’t Provides Details on Stamp Duty Exemptions, New RPGT

Dec 31, 2018


In a bid to boost home ownership, stimulate the soft housing market and tackle the residential overhang, Malaysian citizens buying their first residential property will be fully exempted from paying stamp duty for residences priced up to RM1 million, according to Finance Minister Lim Guan Eng.

“As announced in Budget 2019, the Pakatan Harapan (PH) government has agreed to give 100 percent stamp duty exemption as incentive for the purchase of first homes. This move is among the many measures to solve the issue of oversupply of residential properties which continue to increase,” he said on Saturday (28 Dec).

For homes priced up to RM300,000, the buyer will not need to pay stamp duty on the instrument of transfer and mortgage contract for transactions executed between 1 January 2019 to 31 December 2020.

“For homes priced between RM300,001 to RM500,000, the instrument of transfer and loan agreement is exempted, but limited to the first RM300,000 for sale and purchase agreements completed between 1 July 2019 to 31 December 2020.

“However, the exemption is limited to the instrument of transfer for the purchase of houses priced between RM300,001 and RM1 million from any housing developer, from Jan 1, 2019, to June 30, 2019,” Lim said.

Moreover, Lim revealed that the authorities will temporarily retain the stamp duty rate for instruments of transfer for current assets (surat cara pindah milik harta semasa) levied on properties costing over RM1 million to a maximum of RM2.5 million from 1 January to 30 June 2019.

For the stamp duty for the instrument of transfer for such properties, the rate will increase by 1.0 percentage point in 1 July. Previously, the federal government said during the tabling of Budget 2019 that the stamp duty for such homes will be increased from 3.0 percent to 4.0 percent by 1 January 2019.

Aside from that, Lim announced that Malaysians selling houses priced below RM200,000 for deals finalised before 1 January 2019, don’t need to pay the base Real Property Gains Tax (RPGT).

“During the tabling of the Budget, the government has agreed to increase RPGT rates on profits generated from disposing real properties and shares from real estate companies after five years.”

“However the government is concerned about the people’s welfare and wants to ensure Malaysians are not burdened with the RPGT imposed,” he explained.
Under Budget 2019, Malaysians and foreigners need to pay an RPGT of 5.0 percent and 10.0 percent whenever they sell a property. Previously, only those who have sold their homes within five years of buying it are required to pay this tax.


Image source: Malay Mail


Ready for 2019? Check out PropertyGuru’s predictions for the 2019 property market in Malaysia with a lookback at the 2018 asking price and rental price trends, as well as most popular townships to buy a propertyRead Property Outlook Report 2019 here.

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Sherry Chang
Property Negotiator