WHEN you purchase a property, there are various expenses you will need to be prepared for. The initial costs will include your deposit, legal fees, memorandum of transfer (MOT) charges and stamp duty.

Stamp duty is a form of tax levied on each and every property purchase in Malaysia. It is in fact levied on every legal and financial instrument, and can be in the form of fixed duty or ad valorem duty.

In the latter, the amount of duty payable will vary on the type and value of the instrument concerned.

In Malaysia, stamp duty is usually borne by the purchaser, and the instrument has to be stamped within 30 days of execution, failing which, there will be a penalty imposed by the authorities.

In the case of properties, both the sale and purchase agreement and tenancy agreement will attract the ad valorem duty.

When you have made the decision to purchase your property, the task of sourcing for the right one begins. This can be a trying time if you are a first-time purchaser.

My advice is to secure the services of a registered estate agent. The value a good agent can bring is unparalleled.

Good agents can make the entire process simple because of the vast amount of knowledge and experience they have, having practised their trade over many years.

Many first-time house buyers make the mistake of underestimating the amount of money they need in the initial stage of purchase. They take into account money they need for their deposits, less their loan amount. They are also usually diligent about putting some aside for renovations and repairs. The trouble usually starts when they realise there are other costs associated with their purchase, the stamp duty being one of them.

The stamp duty for MOT can be pretty expensive, so it would be disastrous if the necessary funds are not set aside.

To assist first-time home buyers, the government has proposed some stamp duty exemption. For any purchase of a property that is below RM300,000, stamp duty exemption of 100 per cent will be given. If the value of the property is above RM300,000, you will get a full exemption on your first RM300,000 and will pay the prevailing stamp duty rate for the balance purchase price.

This exemption is currently applicable only for sale and purchase agreements executed between January 1 2017 to December 31 2018.

Happy hunting, and may the force be with you.

Source : www.nst.com.my
By SIVA SHANKER
July 6, 2017 @ 7:15pm

 

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

The above exemption is applicable for sale and purchase agreement executed from 1st January 2017 to 31 December 2018.

2017 STAMP DUTY SCALE
First RM100,000 1%
RM100,001 To RM500,000 2%
RM500,001 and above 3%
2018 STAMP DUTY SCALE
First RM100,000 1%
RM100,001 To RM500,000 2%
RM500,001 To RM1,000,000 3%
RM1,000,001 and above 4%

 


Maximum Exemption:

Property Stamp Duty
First RM100,000 1%      1,000.00
RM100,001 To RM300,000 2%      4,000.00
Total      5,000.00
Loan Agreement Stamp Duty
First RM300,000 0.50%      1,500.00
Total      1,500.00

Scenario 1:
Property Price RM300,000
Loan Amount RM270,000 (90%)

Property Stamp duty:
First RM100,000 1%      1,000.00
RM100,001 To RM300,000 2%      4,000.00
Total      5,000.00
Exemption Amount      5,000.00
Balance To Pay               –  
Loan Agreement Stamp duty :
RM270,000 0.50%      1,350.00
Exemption Amount      1,350.00
Balance To Pay               –  

 


Scenario 2:
Property Price RM335,000
Loan Amount RM301,500 (90%)

Property Stamp duty :
First RM100,000 1%      1,000.00
RM100,001 To RM335,000 2%      4,700.00
Total      5,700.00
Exemption Amount      5,000.00
Balance To Pay        700.00
Loan Agreement Stamp duty :
RM301,500 0.50%      1,507.50
Exemption Amount      1,500.00
Balance To Pay            7.50

 


Scenario 3:
Property Price RM250,000
Loan Amount RM225,000 (90%)

Property Stamp duty :
First RM100,000 1%      1,000.00
RM100,001 To RM250,000 2%      3,000.00
Total      4,000.00
Exemption Amount      4,000.00
Balance To Pay               –  
Loan Agreement Stamp duty :
RM225,500 0.50%      1,127.50
Exemption Amount      1,127.50
Balance To Pay               –  

Scenario 4:
Property Price RM500,000
Loan Amount RM450,000 (90%)

Property Stamp duty :
First RM100,000 1%      1,000.00
RM100,001 To RM500,000 2%      8,000.00
Total      9,000.00
Exemption Amount      5,000.00
Balance To Pay     4,000.00
Loan Agreement Stamp duty :
RM450,000 0.50%      2,250.00
Exemption Amount      1,500.00
Balance To Pay        750.00

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