Stamp duty exemption on purchase of property under HOC 2020/2021
Stamp duty exemption on the purchase of residential property under the National Home Ownership Campaign 2020 / 2021
Under the Short-term Economic Recovery Plan (PENJANA) announced on 5 June 2020, the Government proposed to waive the stamp duty on the instruments of transfer and loan agreements for the purchase of residential property priced from RM300,001 to RM2.5 million as part of the Home Ownership Campaign (HOC), under which developers would also offer a discount of at least 10% (see EY Take 5: COVID-19: Short-term Economic Recovery Plan).
To legislate this proposal, the following Exemption Orders were gazetted on 28 July 2020:
- Stamp Duty (Exemption) (No. 3) Order 2020 [P.U.(A) 216]
- Stamp Duty (Exemption) (No. 4) Order 2020 [P.U.(A) 217]
The Exemption Orders will only apply if:
- The sale and purchase agreement (SPA) for the purchase of the residential property is between an individual and a property developer;
- The purchase price in the SPA 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 is executed between 1 June 2020 and 31 May 2021 and is stamped at any branch of the Inland Revenue Board (IRB)
A HOC 2020 / 2021 Certification issued by the Real Estate and Housing Developers’ Association (REHDA) Malaysia, Sabah Housing and Real Estate Developers Association (SHAREDA) or Sarawak Housing and Real Estate Developers’ Associate (SHEDA) will need to be submitted by the individuals to the IRB in order to obtain the exemptions.
The following definitions have also been provided in the exemption orders:
a. Residential property
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 approval for a Developer’s License and Advertising and Sales Permit under the Housing Development (Control and Licensing) Act 1966, Housing Development (Control and Licensing) Enactment 1978, Sabah or Housing Development (Control and Licensing) Ordinance 2013, Sarawak
b. Individual
Purchaser of a residential property who is a Malaysian citizen or co-purchasers of a residential property who are Malaysian citizens
c. Property developer
Property developer registered with REHDA Malaysia, SHAREDA or SHEDA
The Exemption Orders are effective 1 June 2020.
Stamp Duty (Exemption) (No. 3) Order 2020 |
The Order provides that any loan agreement to finance the purchase of a residential property valued from RM300,001 to RM2.5 million under the HOC 2020 / 2021, will be exempted from stamp duty.
Stamp Duty (Exemption) (No. 4) Order 2020 |
The Order provides that all instruments of transfer for the purchase of a residential property valued from RM300,001 to RM2.5 million (based on market value) under the HOC 2020 / 2021, will be exempted from stamp duty in respect of up to RM1 million of the market value of the residential property. Stamp duty of 3% is to be charged on the remaining value of the residential property which is in excess of RM1 million.
