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Stamp duty exemptions on the purchase of first residential homes under the Home Ownership Programme 2022/2023
To further encourage Malaysians to purchase their first home, in Budget 2023, the Government proposed to waive 100% of the stamp duty for purchases of residential property valued at RM500,000 or less, and 75% of the stamp duty for purchases of residential property valued between RM500,001 and RM1 million (see Take 5: Malaysia Budget 2023).
To legislate this proposal, the following Orders were gazetted on 9 June 2023 and are deemed to have come into operation on 1 June 2022:
- Stamp Duty (Exemption) Order 2023 [P.U.(A) 176]
- Stamp Duty (Exemption) (No. 2) Order 2023 [P.U.(A) 177]
- Stamp Duty (Remission) Order 2023 [P.U.(A) 179]
- Stamp Duty (Remission) (No. 2) Order 2023 [P.U.(A) 180]
The Orders will only apply if:
(a) The residential property is purchased through the Malaysian Home Ownership Initiative (i-Miliki) under the Home Ownership Programme 2022/2023
(b) The sale and purchase agreement (SPA) for the purchase of the residential property is between an individual and a property developer
(c) The purchase price in the SPA is the 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
(d) The SPA is executed between 1 June 2022 and 31 December 2023, and is duly stamped by 31 January 2024
(e) The individual has never owned any residential property, including a residential property obtained by way of inheritance or gift, which is held either individually or jointly.
The application for the exemptions and/or remissions will have to be accompanied by a statutory declaration (under the Statutory Declarations Act 1960) confirming points (c) and (e) above.
The definitions below are also outlined in the 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, including a service apartment and small office home office (SOHO) for which the property developer has obtained an approval for the Housing Developers’ License and Advertising and Sales Permit under the Housing Development (Control and Licensing) Act 1966, Housing Development (Control and Licensing) Enactment 1978 or Housing Development (Control and Licensing) Ordinance 2013 Sarawak
b. Individual
Purchaser or co-purchaser of a residential property who is a Malaysian citizen
Stamp Duty (Exemption) Order 2023
The Order provides that any loan agreement to finance the purchase of a residential property valued up to RM500,000 will be exempted from stamp duty.
This Order applies to loan agreements executed between the individual (as named in the SPA) and the following:
(a) A licensed bank under the Financial Services Act 2013 (FSA)
(b) A licensed Islamic bank under the Islamic FSA
(c) A development financial institution (FI) prescribed under the Development Financial Institutions Act 2002 (DFIA)
(d) A co-operative society registered under the Co-operative Societies Act 1993 (CSA)
(e) Any employer who provides an employee housing loan scheme
(f) Borneo Housing Mortgage Finance Berhad incorporated under the Companies Act 2016 (CA)
(g) Mutiara Mortgage and Credit Sdn Bhd incorporated under the CA
(h) A licensed insurer authorized to provide a housing loan under the FSA, or
(i) A licensed takaful operator authorized to provide an Islamic housing loan under the Islamic FSA
Stamp Duty (Exemption) (No. 2) Order 2023
The Order provides that all instruments of transfer executed in relation to the purchase of a residential property valued up to RM500,000 (based on market value) by an individual, will be exempted from stamp duty.
Stamp Duty (Remission) Order 2023
The Order provides a 75% stamp duty remission on the stamp duty chargeable on a loan agreement to finance the purchase of a residential property valued between RM500,001 and RM1 million.
This Order applies to loan agreements executed between the individual (as named in the SPA) and the following:
(a) A licensed bank under the FSA
(b) A licensed Islamic bank under the Islamic FSA
(c) A development FI prescribed under the DFIA
(d) A co-operative society registered under the CSA
(e) Any employer who provides an employee housing loan scheme
(f) Borneo Housing Mortgage Finance Berhad incorporated under the CA
(g) Mutiara Mortgage and Credit Sdn Bhd incorporated under the CA
(h) A licensed insurer authorized to provide a housing loan under the FSA, or
(i) A licensed takaful operator authorized to provide an Islamic housing loan under the Islamic FSA
Stamp Duty (Remission) (No. 2) Order 2023
The Order provides a 75% stamp duty remission on the stamp duty chargeable on any instrument of transfer executed in relation to the purchase of a residential property, valued between RM500,001 and RM1 million (based on market value), by an individual.