When is it the right time to buy a property? Old timers would say 20 years ago, investors would say that it was yesterday. We at Property Insight say that it would be today. Our new government has certainly blessed the Malaysian first-time homebuyer with many attractive benefits, one of which is the waiver on stamp duties, which we will be covering here today!
In this article, we compiled a guide for you about the 2019 Stamp Duty Exemption for First Time Home Buyers.
In an effort to reduce the cost of ownership for Malaysian First Time Home Buyers, stamp duties will be exempted up to RM300,000 on the sale & purchase agreements and loan agreements for a period of 2 years until December 2020.
Basically, here is what the exempted values for RM300,000 will look like starting from 01 January 2019 to 31st December 2020:
Maximum Property Stamp Duty ExemptionMaximum Loan Duty ExemptionRM5,000RM1,500
This is based on the 2019 stamp duty scale:
Period: 01 January 2019 to 30 June 2019
Stamp Duty ScaleFirst RM100,0001%RM100,001 to RM500,0002%RM500,001 and above3%
Period: 01 July 2019 to 31 December 2020
Stamp Duty ScaleFirst RM100,0001%RM100,001 to RM500,0002%RM500,001 to RM1,000,0003%RM1,000,001 to RM2,500,0004%
For homes priced between RM300,001 to RM500,000, the stamp duty exemption on the instrument of transfer and loan agreement is limited to the first RM300,000 and only for an SPA completed between 01 July 2019 to 31 December 2020.
For first time home buyers who are purchasing homes priced between RM300,001 to RM1 million, the stamp duty is exempted on the instrument of transfer for the purchase of homes from 01 January 2019 to 30 June 2019.
Furthermore, the waiver of stamp duties on instruments of transfer for the purchase of residential properties priced up to RM1 million and for loan agreements of up to RM2.5 million that come under the six-month HOC 2019 which runs till June 2019.
Here are some scenarios we have for you to ponder over.
Scenario A:
Property Price : RM300,000
90% Loan : RM270,000
Property Stamp DutyRM5,000Property Stamp Duty ExemptionRM5,000You PayRM0Loan Stamp DutyRM1,350Loan Stamp Duty ExemptionRM1,500You PayRM0
Scenario B:
Property Price : RM500,000
90% Loan : RM450,000
If you sign your Sign and Purchase Agreement & Loan Agreement in the period between 01 July 2019 to 31 December 2020,
Property Stamp DutyRM9,000Property Stamp Duty ExemptionRM5,000You PayRM4,000Loan Stamp DutyRM2,250Loan Stamp Duty ExemptionRM1,500You PayRM750
Scenario C:
Property Price : RM1,000,000
90% Loan : RM900,000
If you sign your Sign and Purchase Agreement & Loan Agreement in the period between 01 July 2019 to 31 December 2020,
Property Stamp DutyRM24,000Property Stamp Duty ExemptionRM5,000You PayRM19,000Loan Stamp DutyRM4,500Loan Stamp Duty ExemptionRM1,500You PayRM3,000
In addition, the property stamp duties are waived for residential properties valued from RM300,001 to RM1,000,000 for 6 months only from 01 January 2019 to 30 June 2019. However, the waiver is only valid for residential properties that are purchased from the developer only. This incentive by the Pakatan Harapan government is among the many measures taken to solve the issue of oversupply of residential properties which continue to increase.
Let’s check out what this means in terms of figures:
Property Price: RM500,000
Property Stamp Duty: RM9,000
Property Price: RM1,000,000
Property Stamp Duty: RM24,000
This is extremely helpful to the first-time house buyer in terms of lower acquisition costs in buying their property, which is critical, especially when there is a need to come out with upfront deposits and costs within a tight budget.
We have also compiled some Q&A that are important to the topic.
Does the waiver include all sub-sale units?
Yes and no. From 01 January 2019 to 31 December 2020, sub-sales are included in the stamp duty exemption for first-time buyers for up to RM300,000 in property values only. However, if you are looking to purchase a property that is valued from RM300,001 to RM1,000,000 from 01 January 2019 to 30 June 2019, the stamp duty exemption is only valid for properties purchased directly from developers only.
Does the waiver include non-first-time buyers?
No, the waiver does not extend to people who have owned property, and this includes people who have inherited properties or jointly own them.
Are the exemptions applicable to small office/home office (SoHo), small office/versatile office (SoVo), small office/flexible office (SoFo) and serviced apartments?
The First Time Home Buyers Stamp Duty exemption is not valid for the aforementioned property titles. They are only valid to ‘residential properties’ that includes houses, condominium units, apartments, and flats built as a dwelling.
However, certain mixed development projects are qualified for the HOC stamp duty exemption. It is best to consult the sales agent to see if the project you are interested in is qualified or not.
When is the waiver counted?
The waiver is only applicable for the Sale and Purchase Agreement and the Loan Agreement.
So if I am interested in a development that will be completed in 2020, will I still get the exemption?
You will get the exemption if you signed the Sale and Purchase Agreement and Loan Agreement during the stipulated period from 01 January 2019 to 31 June 2019.
I bought a unit on the last day of December 2018. Will I still get the exemption?
You will get the exemption if your sign the Sale and Purchase Agreement and Loan Agreement during the stipulated period from 01 January 2019 to 31 June 2019.
