Housing Development Updates: EXEMPTION ORDERS FOR STAMP DUTY

On 9.7.2021, 2 Exemptions Orders were introduced and published to provide various exceptions from stamp duty through: –

• Stamp Duty (Exemption) (No. 4) Order 2021 (PU(A) 301); and
• Stamp Duty (Exemption) (No. 5) Order 2021 (PU(A) 302)

Both orders are deemed to have come into operation on 1 June 2021. They can be downloaded below:

STAMP DUTY (EXEMPTION) (NO. 4) ORDER 2021 (PU(A) 301) Exemption of Stamp duty For Loan Agreement

Stamp duty shall be exempted in respect of any loan agreement to finance the purchase of residential property[1] under the Home Ownership Campaign 2021, the value of which is between RM300,000.00 and RM2,500,000.00.

This Order applies to sale and purchase agreement (SPA) executed between an individual and –

• a licensed bank under the Financial Services Act 2013;
• a licensed Islamic bank under the Islamic Financial Services Act 2013l
• a development financial institution prescribed under the Development Financial Institutions Act 2002;
• a co-operative society registered under the Co-operative Societies Act 1993;
• any employer who provides an employee housing loan scheme;
• Borneo Housing Mortgage Finance Berhad (Company Registration Number: 25457-V) incorporated under the Companies Act 2016;
• Mutiara Mortgage and Credit Sdn Bhd (Company Registration Number: 257663-T) incorporated under the Companies Act 2016;
• a licensed insurer authorized to provide a housing loan under the Financial Services Act 2013; or
• a licensed takaful operator authorized to provide an Islamic housing loan under the Islamic Financial Services Act 2013.

STAMP DUTY (EXEMPTION) (NO. 5) ORDER 2021 (PU(A) 302) Exemption of Stamp duty For Memorandum of Transfer

Paragraph 2(1): All instrument of transfer for the purchase of a residential property under the Home Ownership Campaign 2021, the value[2] of which is between RM300,000.00 and RM2,500,000.00 executed by an individual shall be exempted from stamp duty.

Exemption of Stamp duty for Residential Property that is valued less than RM1,000,000.00

The stamp duty exemption referred to in subparagraph 2(1) shall only be for the stamp duty that should be imposed for the first RM1,000,000.00 or less from the value of the residential property.

Stamp duty for Residential Property that is valued more than RM1,000,000.00

Stamp duty of RM3.00 shall be imposed for every RM100.00 of the balance amount of the value of the residential property which is more than RM1,000,000.00.

Both Exemptions Orders share similar provisions set out below: –

What are the conditions for the exemption?

The above stamp duty exemptions only apply if: –

• the SPA for the purchase of the residential property is between an individual[3] and a property developer[4];

• the purchase price in the SPA referred to in (a) above is a price after a discount of at least 10% from the original price offered by the property developer except for a residential property which is subject to controlled pricing; and

• the SPA for the purchaser of residential property is executed on/after 1.6.2021 but not later than 31.12.2021 and is stamped at any branch of the Inland Revenue Board Malaysia.

How to apply for the exemption?

A Home Ownership Campaign 21 Certification issued by the REHDA[5] Malaysia, SHAREDA[6] or SHEDA[7] shall be submitted by the individual concerned to any branch of the Inland Revenue Board Malaysia for the purpose of obtaining the exemption.

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[1] Means a house, a condominium unit, an apartment or a flat, purchased or obtained solely to be used as a dwelling house, and includes a service apartment and small office home office (SOHO) for which the property developer has obtained an approval for a Developer’s License and Advertising and Sales Permit under the Housing Development (Control and Licensing) Act 1966 [Act 118], Housing Development (Control and Licensing) Enactment 1978, Sabah [No. 24 of 1978] or Housing Development (Control and Licensing) Ordinance 2013, Sarawak [Cap. 69]

[2] For the purpose of paragraph 2(1), the value of the residential property shall be based on the market value

[3] Means a purchaser of a residential property who is a Malaysian citizen or co-purchasers of a residential property who are Malaysian citizens

[4] Means a property developer registered with the REHDA, SHAREDA or SHEDA

[5] Real Estate and Housing Developers’ Association

[6] Sabah Housing and Real Estate Developers’ Association

[7] Sarawak Housing and Real Estate Developers’ Association