UPDATED: 15 JANUARY 2021
Finding your dream home will always be an important memory, especially for the first-time homebuyers. However, you can’t overlook the stamp duty, an unavoidable cost in real estate purchases.
The stamp duty is the tax placed on your property documents during the sale or transfer of the property – as specified under the First Schedule of Stamp Duty Act 1949.
How about we look through the 5 top questions regarding stamp duty to help you make that dream home a reality.
The stamp duties concept is a form of a written document and not a transaction – levied on legal, commercial and financial instruments. Any individual who needs to pay the stamp duty is based on the Third Schedule of Stamp Act 1949.
Did you know there are two types of stamp duty; Ad Valorem Duty and Fixed Duty?
What about the rate of the Stamp Duty?
The tax rate charged is dependable to the First Schedule of the Stamp Act 1949.
What does the date of valuation have to do with Stamp Duty?
The date of valuation is the date of execution of the Sale and Purchase Agreement. Otherwise, it is the date of execution of the instrument of transfer.
The workings of the stamp duty are tax based on specific tiers, with its own percentage for each level;
A property valued at RM500,000 today would be liable for charges across the first two tiers in layman terms.
So how would the calculations look like regarding stamp duty? Let’s look at another example below;
While the Stamp Duty’s concept is used to sell and transfer any property, it also applies on any loan of agreements – a flat 0.5% rate applied on the full loan value.
Take this as an example – you wished to purchase a property about RM400,000, and you are applied for a 90% loan (RM350,000) – as 10% of the property price will be for the downpayment.
If you take out a loan of RM350,000 to cover your purchase, you will receive a stamp duty of RM1,750 (0.5% x RM350,000) on that loan.
Next time, remember this formula for the next future purchase;
Stamp Duty for Instrument of Transfer + Stamp Duty on Loan Agreement = Total Stamp Duty to be Paid.
According to the Budget 2021 announcement of last year;
As of January 18 2021, the Prime Minister Tan Sri Muhyiddin Yassin announced the “Perlindungan Ekonomi dan Rakyat Malaysia” (PERMAI) assistance package worth 15 billion Malaysia Ringgit.
A total of 22 initiatives will be implemented under PERMAI, anchored on three main objectives; combating the COVID-19 outbreak, safeguarding the people’s welfare, and supporting the business continuity.
As a homebuyer, investor or a person of interest in the real estate industry, here are a few aids that would help you along the way;
We hoped our simple crash course helped you understand a more in-depth what stamp duty is all about.
Before finalizing your home purchase, have a visit to the Valuation and Property Services Department (JPPH), with the listed documents you need to submit;
All Stamp Duty valuations shall be reported for clients within one working for standard case and five working days for non-standard cases from the office’s receipt date.
For online enquiries, users can check their status of the case via;
Website Link – http://www.jpph.gov.my
Text Message  – Type JPPH <space> DUTISETEM <space> Adjudication No. <space> Email
If you have any objection on the property’s valuation, it must be directed to the SDO with a copy sent to the JPPH.
Article by: IQI Global