Effective from 1 January 2021, an individual who acquires a residential property with market value of not more than RM500,000 for the first time may be entitled to two benefits of stamp duty exemption. This is part of the Government’s initiative to support the property industry and to encourage home ownership, in addition to the Home Ownership Campaign 2020/2021 originally ended on 31 May 2021, and subsequently extended up to 31 May 2021.

First Home Ownership campaign

Under the newly published First Home Ownership campaign, stamp duty is exempted for the instrument of transfer where the sale and purchase agreement for the purchase is executed on or after 1 January 2021 but not later than 31 December 2025. The other condition (or rather the “catch”) is the individual has to declare that he has never owned any residential property including one which is obtained by way of inheritance or gift, which is held either individually or jointly.

Similarly, the loan agreement to finance the purchase of the residential property by the said individual is also entitled to stamp duty exemption. The loan could be obtained from a licensed bank or Islamic bank, a licensed development financial institution, a licensed insurer or a licensed takaful operator, a co-operative society, any employer under an employee housing loan scheme, the Borneo Housing Mortgage Finance Berhad and the Mutiara Mortgage and Credit Sdn Bhd. Loan obtained from other lender not listed will not be entitled to the stamp duty exemption.

Residential property in this case means a house, a condominium unit, an apartment or a flat purchased solely to be used as a dwelling house. Serviced apartments or Small Office Home Office (SOHO) have not been included under this exemption. The individual must be a Malaysian citizen to qualify for the stamp duty exemption, who purchases singly or jointly with others.

HOC Campaign 2020/2021

In response to the Covid-19 pandemic impact, the Government has launched the Home Ownership Campaign 2020/2021 (“HOC Campaign”) for the initial period from 1 June 2020 to 31 May 2021. This campaign has been extended up to 31 December 2021. Stamp duty is exempted on instrument of transfer for the first RM1,000,000 of the market value of the residential property purchased by an individual from registered housing developer.

The market value of the residential property purchased most be more than RM300,000 but not more than RM2,500,000 (after the compulsory 10% discount), and the individual must be a Malaysian citizen to qualify for the stamp duty exemption, who purchases singly or jointly with others. Serviced apartments and SOHO purchasers are entitled to this stamp duty exemption in addition to purchasers for house, condominium, apartment or flat solely for dwelling use.

Stamp duty on the loan agreement for loan to finance the HOC Campaign purchase is similarly exempted. Unlike the 2021-2025 First Home Ownership campaign, HOC Campaign is not expressly limited to first time home buyers.

With the drastic economic slowdown amidst the pandemic, many property sales are being promoted with additional goodies and packages in addition to price discount. It is indeed a good time for readers who genuinely intend to invest in a home to do so now, be it direct purchase from developers or from secondary market, and maximize the benefits of the stamp duty exemption.