Updated as at March 2019 - New charges on Stamp Duty and RPGT

TRANSFER OF PROPERTIES IN 2019

A) Stamp Duty Rates (For Transfer of Real Property)
Stamp Duty from 1st July 2019 onward:- 

Price / Market Value (Whichever is higher)     Rate of Stamp Duty
      First RM 100,000.00                                              1%
      RM 100,001.00 to RM 500,000.00                        2%
      RM 500,001.00 ro RM 1,000,000.00                     3%
      RM 1,000,001.00 and above                                  4%

B) Stamp Duty Rates (For Loan Agreement)

The rate of Stamp Duty chargeable on Loan Agreementis 0.5% on the total Loan Agreement.

Example: Loan Amount RM 700,000.00 x 0.5% = RM 3,500.00.

C) Stamp Duty Rebate ( For Owner of First Residential House)

You are eligible for the following Rebates / Exemptions if :-

- If you purchasing a residential house only ( landed House, condominium, Apartments or Flat )

- You are a Malaysian citizen who have yet to own any residential property, including by way of heritance, or gifts (individually or jointly) (e.g. not buy or sell property before, not receive property from any third party as gift, not lend your name to purchase property before).

D) Real Property Gain Tax (RPGT)

RPGT Retenion Rate:
  * 3% for Malaysian
  * 7% for Foreigner

RPGT Rate in 2019

                                   Malaysian        Non-Malaysian         
                                 or Permanent   or Non-Permanent
                                    Residents           Residents                 
Period of Disposal    ( Individual )       ( Individual )         Company
   
        Within 3 years             30 %                  30 %                    30 %
   In the 4th year              20 %                 30 %                     20 %
   In the 5th year              15 %                 30 %                     15 %
   6th year & thereafter     5 %                  10 %                     10 %

Nonetheless :

*    Exemption of property of RM 200,000.00 or below:  Malaysian citizens would be exempted from RPGT on gains arising from their sale of property made in the 6th year and onwards if the selling price is less than RM 200,000.00 or lesser. 

*    Life-Time Exemption : The RPGT Life-Time Exemption is still applicable whreby one seller has the option to use this RPGT waiver for residential property, for ONE time only.

Property Related Articles Index

1.   Existing Stocks and & Houses supply in Malaysia till 2020
2.   Extension of Leasehold property in Selangor.
3.   Malaysia Real Property Gain Tax (RPGT)
4.   Changes to the Strata Law  (2016)
5.   New Selangor guidelines for Foreigner property purchase 
6.   GST in Malaysia explained
7.   How GST impact on Home Prices and Property Prices
8.   OPR & BLR increase from 10th July 2014
9.   How to legally deal with a Tenant when they do not pay up
10. Green Building Index (GBI)
11. 5 Types of Houses make you poorer
12. Residential Property Prices Head North (2008 - 2012)

How To Legally Deal With A Tenant When They Do Not Pay Up

http://blog.wonderlist.property/how-to-legally-deal-with-a-tenant-when-they-do-not-pay-up/

5 CHANGES TO THE STRATA LAW (2016)

http://www.propertypricetag.com/display_properties/163711

5 Types Of Houses Makes You Poorer

EXTENSION OF LEASEHOLD IN SELANGOR

HOW TO EXTEND YOUR LEASE FOR LEASEHOLD PROPERTIES IN SELANGOR

NEW Selangor guidelines on Property purchases by Foreigners Effective September 2014

SELANGOR imposes restrictions on foreigners buying properties in some districts

Developers and property agents were thrown into a flux last week over a new set of guidelines on property purchases in Selangor by foreigners, permanent residents (PR) and foreign companies.

Generally, the new guidelines restrict foreigners from buying all types of properties costing less than RM2mil in most of the districts inthestate.

Previously,the cap was set at RM1mil,as announced during last October’s budget. Some property developers are still in the dark over the matter while others are coming to grips with the significance of the move’s effectin an already slowing market.

The measures, outlined in a circular dated Aug 28, were effective from Sept 1 this year. The circular was signed by Department of Lands and Mines Selangor director Datuk Kamarulzaman Jamil.

According to the new guideines, residential, commercial and industrial properties are divided into three zones.

The minimum price for purchases by foreigners is based on the zones.

Foreigners, PR holders and foreign companies are only permitted to buy residential properties that are priced at a minimum RM2mil for Zone 1 and 2, and a minimum threshold of RM1mil for those located in zone 3, according to the circular.
Zone one encompasses the districts of Petaling, Gombak, Hulu Langat, Sepang and Klang.

Zone two are Kuala Selangor and Kuala Langat while the districts under zone three are Hulu Selangor and Sabak Bernam.

Besides increasing the minimum threshold, the land office permits foreigners, PR holders and foreign companies to buy strata and landed strata properties only.

“The new guidelines have raised the threshold price considerably besides putting up new barriers on the type of properties they can buy,” a developer said

New Selangor guidelines on property purchases by foreigners

In the commercial and industrial sub-segments,they are only permitted to buy propertiespricedRM3mil andabove locatedinallthe three zones.

They are barred from buying properties set aside for bumiputras. As for non-bumiputra units, they can buy not more than 10% of those units.

Agricultural land, Malay reserve land, non-strata landed residentials and auction properties are off limits.

The new guidelines also govern participants of Malaysia My Second Home programme.

They are to buy directly from the developers and not from the secondary market and are eligible to buy one residential unit only per family.

“This means the state of Selangor is going the way of Johor. Land is a state matter. While the Federal Government may propose its policies – unveiled during each budget – the individual states can go along with the measures proposed, or they can propose their own measures,” a source said.

“We saw the state authorities in Johor proposing their own rules with regard to land issues a few months after Budget 2014. We now see Selangor doing the same,” the source added.

The property source said that the Aug 28 circular seemed to be “a preemptive measure” to prevent foreign developers from entering the state in a big way.

Source: The Star online

OPR & BLR Increase from 10th July 2014

Source from www.malaysiahousingloan.com

This OPR hike may translate to an increase in the pricing of loans for consumers.

Banks had started to announce their increase in Base Lending Rate (BLR). Public Bank are one of the banks that had confirm their new BLR is 6.85% effective 10th July 2014.

Most analysts are expecting a high probability of a rate hike in 2014, which it is true. While less a handful opined that it could go up to 50bps by end of 2014. If there is a 50bps hike, one can generally expect that BLR will increase to 7.10%.

The OPR is an overnight interest rate set by BNM. It is interest rate at which a bank lends to another bank.The OPR, in turn, has an effect on employment, economic growth and inflation. It is an indicator of the health of a country’s overall economy and banking system.

If you’re a borrower, when the interest rate goes up, you need to pay more in terms of instalment. Alternatively, your term of loan (loan tenure) increases if you don’t want to change your instalment payment.

But, if you are a depositor, for example you have fixed deposit or saving account with the banks, this mean your fixed deposit and saving account dividend will be increase too.

OPR, BLR & deposit interest rate are co-related. Once OPR increase, BLR and deposit interest rates will be follow suit too.

Here is the example of how it would affect you:

Based on the example above, the 25bps hike will not be severely affect. However, over the loan period, it comes up to a substantial amount.

Green Building Index (GBI)

2014 ~ More Malaysian developers are supporting green building initiatives. Right now, we have the #GreenBuildingIndex or #GBI to evaluate the sustainability of buildings in Malaysia. The Diamond Building in Putrajaya is certified green. Here's how you can make it to the certified list, too.

How GST Will Impact Home Prices & The Property Market

With the coming implementation of Goods & Service Tax (GST) in April 2015, many Malaysians are concerned with what this bodes for prices in general. It is inevitable that home prices will also be affected. In this article, we explain how home and property prices will be affected moving forward.

To properly appreciate how GST will affect home prices, it is necessary to first understand how GST works.  Aside from GST, one must also have an understanding of the Sales Tax, which is the existing tax scheme affecting the property sector. GST will supplant the Sales Tax come April 2015.

Tax Scheme on Residential Property – The Similarities

In comparing both tax schemes, we have to first identify their similarities.

One similarity between GST and the existing Sales Tax scheme is that no taxes are charged or will be charged to the consumer on the purchase of a home / residential property. For GST, residential properties fall under the “Exempt Rated” basket of goods. (But do take note that GST will be charged to the consumer for commercial) 

However, during the creation of the final product (also known as the input stage in tax parlance), under both tax schemes, developers would incur taxes during procurement of their inputs and materials. And this is where the differences start to become apparent between both tax schemes. The tax rate for inputs and materials vary between GST and Sales Tax.

Sales Tax VS GST for Residential Properties – The Differences

Based on the Sales Tax Act of 1972, basic building materials such as bricks, cement and floor tiles fall inside First Schedule Goods, in which all the goods in this category will not be subjected to sales tax. Meanwhile, other building materials fall inside Second Schedule Goods, in which all the goods in this category will only be charged sales tax of 5%.

Under the new GST implementation, all building materials and services (E.g. Contractors, engineers) will be subject to GST with a standard rate of 6%. This will invariably raise the production cost for developers.

If you understand how GST works, you will notice that in most cases, the additional tax cost is simply passed on to the final consumer (Standard-Rated goods), or is claimed back from the government (Zero-Rated goods). But in this case (Exempt-Rated), the additional tax cost is borne by the party before the final consumer – The developer.
The developer does not have a next “victim” in the supply chain.

This seems like good news for home buyers as they do not have to pay GST when purchasing a home. However, one should not be too happy about this. It is no stretch of the imagination to think that developers would try to build in the additional tax costs into the final sale price implicitly.

Before & After GST – A Comparison

The tables below show a comparison between the cost of a new property before and after GST. Certain taxes and costs leading up to the sale to the final consumer have been simplified for this purpose.

Also, an assumption is made that developers are able to transfer 100% of all incurred tax costs over to the consumer via the sale price.

The example above shows a price increase of 3.41% for new residential properties post-GST implementation. But there is a plus point to this.

Overall, new residential properties may register a lower overall increase in tax burden compared to Commercial Properties that are Standard-Rated. This is because there still is the chance that developers may only transfer some and not all of their tax cost increases into the final retail price.

The downside to this is that where pricing for new commercial properties will be cleaner (Sales Price + GST), pricing for new residential homes would look inflated. This, in turn, will undoubtedly have a knock on effect on prices in the secondary house market.

Conclusion

As a home buyer, it pays to know what the implementation of GST might bode for home prices moving forward. If you skipped the entire article, here are all the key insights in a nutshell:

1. With GST, there should be a once-off increase in property prices across the board
2. While developers may not bill home buyers for GST, they could transfer the costs implicitly via the sale price
3. The overall price increase for new residential properties could be marginally lower than that for new commercial properties
4. The secondary home market should see a knock on effect in prices

Armed with this knowledge, you can make a better decision on when to purchase your home.

BUY PROPERTY NOW? What if demand crumbles as interest rates rise?

GST In Malaysia Explained

In Malaysia's Bdget 2014 speech, the implementation of Goods and Service 
Tax (GST) was perhaps the hottest topic.  To be introduced in April 2015, it 
will replace Malaysia's Sales Tax (10%) and Service tax (6%).  Under GST, 
most of the goods and services (except basic necessities) will be charged a 
tax rate of 6% at every stage of the supply chain.  The question now on 
everyone's mind - How will life be after GST ?

To identify the most likey effects, we must first understand the different 
implementations of GST and their mechanisms.

Types of GST

There will be three different categories of goods and services under the GST
scheme in Malaysia.  They are:

1.  Standared - Rated GST

Goods and services in this category will be charged a tax rate of 6% at every 
stage of the supply chain.  The tax is billed and collected by businesses and 
paid to the government.  Every party except the final consumer can claim 
credits on the GST they already paid (know as input tax).  Examples of the 
goods in this category are cloth, car and fruits.  The following diagram shows 
how Standard - Rated GST works:

2.  Zero - Rated GST 

Goods and Services in this category will be charged a GST rate of 0%.  This
means that GST is not charged to the final consumer.  But businesses CAN 
claims back credits on their input tax.  Examples of goods in this category 
are basic food item (meats, fish and cooking oil) and first 200 unit of electri-
city per month.  The following diagram shows how zero-rated GST works, 
assuming the final product is zero-rated but the raw materials are standard
rated: 

3.  Exempt-Rated GST

Goods and services that fall in this category will be non-taxable and are not 
subject to GST at the output stage.  This means that GST is not charged to
the final consumer.  But it also means that businesses, particularly the final
party in the supply chain (before the final consumer) CANNOT claim back
credits on their input tax even if they might have incurred it earlier on.  
Examples of goods in this category are residential property and health care
services.  The following diagram will give a clearer picture on how Exempt-
Rated GST works:

Conclusion

GST is a progressive tax regime that will supplant the Sales Tax and Service
Tax in Malaysia in the near future.  Understanding its mechanisms will help 
us to be better gauge its potential impact of our lives and prepare for it.

Existing Stocks and Houses Supply till 2020

Residential Property Prices Head North ( 2008 - 2012)

Malaysia Real Property Gain Tax (RPGT)

In the Budget 2014, the government is proposing the RPGT be increased to 30%  from the current 15% on all properties sold before three years from the date of  purchase and whereas for disposals within the holding period up to 4 and 5 years,  the rates are increased to 20% and 15%, respectively. For disposals made in  the sixth and subsequent years, no RPGT is imposed on citizens, whereas  companies are taxed at 5%. Real Property Gain Tax (RPGT) is a tax imposed on gains from disposal of all  types of properties such as residential and commercial buildings, land and shares  of real property companies. RPGT is imposed on the net gains from disposal of  property after deducting the following costs:-  1. Acquisition price  2. Stamp duty  3. Legal fees  4. Renovation costs  5. Commission for sales and administrative payments The following RPGT exemptions which were implemented under the previous  regime continue to be available: (a) RPGT exemption on gains from the disposal of one residential property once        in a lifetime to individuals; (b) RPGT exemption of up to RM10,000 or 10% of the net gains, (whichever is        higher) from the disposal of real property by individuals;  and (c) RPGT exemption on gains arising from the disposal of real property between        family members (e.g. husband and wife, parents and children, and grand-      parents and grandchildren). The current RPGT rates vary from 0% to 30%, depending on the holding period.  The holding period refers to the period between the acquisition date and the  disposal date of the property. To further curb speculative activities, the RPGT rates on disposal of properties  and shares in real property companies effective 1 January 2014 shall be as follows:-  Disposal  (from purchased date)  Company  Individual  (Citizen & PR)  Individual  (Non Citizen)  1st 3 years  30%  30%  30%  in 4th year  20%  20%  30%  in 5th year  15%  15%  30%  After 5th year  5%  0  5%

Example To Illustrate Calculation Of RPGT Disposal Price on 2 Jan 2014 300,000 Less: Renovation/extension costs 20,000 Legal fees 3,000 23,000 277,000 Acquisition Price on 1 Jan 2012 200,000 Add: Duty stamp paid 3,000 Legal fees 2,500 5,500 205,500 Profit 71,500 Less: Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater 7,150 (-10,000) Chargeable gain 61,500 Rate of RPGT 30% applied for disposal in 1st 3 years after the date of acquisition. RPGT on RM61,500 @ 30% = RM18,450