UPDATES: Real Property Gains Tax and Stamp Duty exemption

Aug 5, 2020

Updates:

The Real Property Gains Tax and Stamp Duty exemption under the Government’s Pelan Jana Semula Ekonomi (Penjana) announced by Government of Malaysia on 5th June 2020 was gazetted on the 28th July 2020 and came into operation on the 1st June 2020 retrospectively.

Real Property Gain Tax (Exemption) Order 2020 [P.U.(A) 218]

Under the Exemption order, the Minister exempt any individual who is a citizen from paying the chargeable gains for the real property gains tax (“RPGT”) under the Real Property Gains Tax Act 1976 (“RPGT Act”) accruing on the disposal of maximum three (3) units of residential property from 1st June 2020 to 31st December 2021 subject to the following conditions:-

  1. the residential property disposed is not acquired within the period of 1st June 2020 until 31st December 2021 either:-
    1. by way of transfer between spouse or
    2. by way of gift between spouses, parent and child, or grandparent and grandchild where the donor is a citizen; and
  2. the sale and purchase agreement and instrument for transfer for disposal is executed on or after 1st June 2020 but not later than 31st December 2021 and is duly stamped not later than 31st January 2022.

Commentary:

There is no other guidelines from the relevant authorities that the disposer is required to provide any document to support the declaration in the CKHT 3 Form that the property is exempted under the exemption order. Further, the exemption granted under the Exemption Order does not affect the right of an individual to elect for exemption under the other provisions of the RPGT Act.

 

Stamp Duty (Exemption) (No.3) Order 2020 [P.U.(A) 216]

Pursuant to this Stamp Duty (Exemption) (No.3) Order 2020, all stamp duties on loan agreements in respect to finance the purchase of residential property under the Home Ownership Campaign 2020/2021 (“HOC”) shall be exempted subject to the conditions as follows:-

  1. sales and purchase agreement under the HOC between an individual with a property developer who has the HOC Certification issued by REHDA, SHAREDA or SHEDA;
  2. the financing amount is between RM300,000.00 to RM2,500,000.00;
  3. the financier shall be:-
    1. a licensed bank under the Financial Services Act 2013;
    2. a licensed Islamic bank under the Islamic Financial Services Act 2013;
    3. a development financial institution prescribed under the Development Financial Institutions Act 2002 [Act 618];
    4. a co-operative society registered under the Co-operative Societies Act 1993 [Act 502];
    5. any employer who provides an employee housing loan scheme;
    6. Borneo Housing Mortgage Finance Berhad incorporated under the Companies Act 2016;
    7. Mutiara Mortgage and Credit Sdn Bhd incorporated under the Companies Act 2016;
    8. a licensed insurer authorized to provide a housing loan under the Financial Services Act 2013; or
    9. a licensed takaful operator authorized to provide an Islamic housing loan under the Islamic Financial Services Act 2014.

 

Stamp Duty (Exemption) (No.4) Order 2020 [P.U.(A) 217]

Pursuant to the Stamp Duty (Exemption) (No.4) Order 2020, the stamp duty chargeable on the first one million shall be exempted and the amount after the first million shall be imposed at  3% subject to the following conditions:-

  1. sales and purchase agreement under the HOC is executed on or after 1st June 2020 but not later than 31st May 2021 between an individual with a property developer who has the HOC Certification issued by REHDA, SHAREDA or SHEDA and stamped;
  2. the purchase price in the sale and purchase agreement is a price after a 10% discount from the original price offered by the developer;
  3. the value of the residential property shall be based on market value.