Stamp duty updates

Stamp duty updates

In 2019, the Government announced that RM550 million had been allocated for the Oil Palm Smallholders Replanting (TSPKS) and the Oil Palm Smallholders Agriculture Input (IPPKS) soft loan schemes. The loans are given at an interest rate of 2%.

The Stamp Duty (Exemption) (No. 7) Order 2020 [P.U.(A) 379] was gazetted on 28 December 2020 to provide a stamp duty exemption on the financing agreements under the TSPKS and IPPKS financing programmes pursuant to the Tawarruq concept executed between an individual and Bank Pertanian Malaysia Berhad (Agrobank). The exemption will apply to financing agreements executed between 24 July 2019 and 31 December 2021.

The Order is effective 24 July 2019.

In Budget 2021, it was proposed that the stamp duty exemption provided on the relevant instruments executed by the original house purchaser and the approved rescuing contractor or developer be extended to 31 December 2025 (see EY Take 5: Malaysia Budget 2021). To legislate this, the following Amendment Orders were gazetted on 31 December 2020:

• Stamp duty (Exemption) (No. 5) 2013 (Amendment) Order 2020 [P.U.(A) 395]

This Order amends the Stamp Duty (Exemption) (No. 5) Order 2013 [P.U.(A) 91] that provides stamp duty exemption on the relevant instruments executed by the original house purchaser.

• Stamp Duty (Exemption) (No. 6) 2013 (Amendment) Order 2020 [P.U.(A) 396]

This Order amends the Stamp Duty (Exemption) (No. 6) Order 2013 [P.U.(A) 92] that provides stamp duty exemption on the relevant instruments executed by a rescuing contractor or developer approved by the Minister of Housing and Local Government (MHLG).

In Budget 2021, to continue encouraging the B40 households to learn the benefit of insurance and takaful, and over time acquire their own protection policies, the Government proposed to extend the waiver of stamp duty for all Tenang Insurance products for another five years.

To legislate this, the Stamp Duty (Exemption) (No. 5) 2018 (Amendment) Order 2020 [P.U.(A) 397] was gazetted on 31 December 2020. The Amendment Order provides a stamp duty exemption for any insurance policies and takaful certificates for Perlindungan Tenang products issued by a licensed insurer or a licensed takaful operator until 31 December 2025, with an annual premium or takaful contribution not exceeding RM100.

The Amendment Order is effective 1 January 2021.

The Stamp Duty (Exemption) (No. 2) Order 2017 [P.U.(A) 408], gazetted on 26 December 2017, provides a stamp duty exemption on a contract note executed for the sale and purchase transaction of a structured warrant or exchange-traded fund approved by the Securities Commission (SC) under the Capital Markets and Services Act 2007. The Order applies to contract notes executed between 1 January 2018 and 31 December 2020.

In Budget 2021, it was proposed that the exemption for the contract note executed for the sale and purchase transaction of an exchange-traded fund be extended for another five years, until 31 December 2025.

To legislate this, the Stamp Duty (Exemption) (No. 2) 2017 (Amendment) Order 2020 [P.U.(A) 421] was gazetted on 31 December 2020.

The Amendment Order came into operation on 1 January 2021.

As part of the Government’s efforts to provide comfortable and quality housing, especially to the low-income group, the Stamp Duty (Exemption) (No. 8) Order 2020 [P.U.(A) 423] was gazetted on 31 December 2020. The Order provides a stamp duty exemption on the following instruments for the purchase of a flat under the National Economic Action Council’s People Housing Programme (PPR-MTEN) and Dewan Bandaraya Kuala Lumpur (DBKL)’s Public Housing Programme (PA DBKL), which are executed between 1 January 2020 and 31 December 2024:

The following terms have been defined in the Order:

(a)  Financial institution

Same meaning as that assigned to a “banker” in Section 2 of the Stamp Act 1949

(b)  SFS

Loan facilities provided by SPWP which are fully owned by Yayasan Wilayah Persekutuan

The Order is deemed to be in operation from 1 January 2020 until 31 December 2024.