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New exemptions on stamp duty and real property gains tax (RPGT)

On 5th June 2020, the Government unveiled Pelan Jana Semula Ekonomi Negara or the National Economic Recovery Plan (“PENJANA”) which contains of 40 initiatives strategically designed to propel the nation’s businesses recover from the impact of COVID-19. Please refer to Prime Minister’s Office of Malaysia Official website at here


PENJANA unveiled the following to stimulate the real estate sector:


i. Reintroduce the Home Ownership Campaign 2020/2021 (“HOC”) which previously ended in December 2019;

ii. Stamp duty exemption on instruments of transfer and loan agreements for acquisitions of residential properties value price between RM300,000 and RM2.5 million. The exemption on any instrument of transfer is limited to the first RM1 million of the value of the residential property while full stamp duty exemption is given for loan agreement; and

iii. the Real Property Gains Tax (“RPGT”) exemption for all Malaysian Citizens.

These legislations had gazetted on 28th July 2020 with retrospective effect from 1st June 2020.


A. Stamp Duty (Exemption) (No. 3) Order 2020


Stamp duty shall be exempted in respect of any “loan agreement” to finance the purchase of residential property under the HOC, the value of which is more than RM300,000.00 and RM2.5 million. Such exemption will be given subject to the following conditions:


· the sale and purchase agreement (“SPA”) is between an individual who is a Malaysian Citizen or co-purchasers who are Malaysian Citizens (not applicable to foreign buyers) and a registered property developer;

· the SPA is executed on or after 1st June 2020 and not later than 31st May 2021 and stamped at any branch of the Inland Revenue Board Malaysia (“IRB”);

· the SPA subject to that the developers provide discount of at least 10% from the original price except for a residential property which is subject to controlled pricing; and

· the property developer who is registered with the Real Estate and Housing Developers’ Association (“REHDA”) Malaysia, Sabah Housing and Real Estate Developers Association (“SHAREDA”) or Sarawak Housing and Real Estate Developers’ Association (“SHEDA”).


A copy of the Order can be referred at here.

B. Stamp Duty (Exemption) (No. 4) Order 2020


Stamp duty shall be exempted on all the “instrument of transfer” for the purchase of a residential property under the HOC, the value of which is more than RM300,000.00 and RM2.5 million. Such exemption will be given subject to the following conditions:


· the SPA is between an individual who is a Malaysian Citizen or co-purchasers who are Malaysian Citizens (not applicable to foreign buyers) and a registered property developer;

· the SPA is executed on or after 1st June 2020 and not later than 31st May 2021 and stamped at any IRB branch;

· the SPA subject to that the developers provide discount of at least 10% from the original price except for a residential property which is subject to controlled pricing; and

· the SPA is made between an individual and a property developer who is registered with the REHDA, SHAREDA or SHEDA.


A copy of the Order can be referred at here.

C. Real Property Gains Tax (Exemption) Order 2020 (“RPGT Exemption Order”)


Under the New RPGT Exemption Order 2020, gains arising from disposal of residential properties after 1st June 2020 until 31st December 2021 will be exempted from Real Property Gains Tax (“RPGT”). Such exemption will be given subject to the following conditions:


· Each disposer is only eligible to such exemption up to three (3) units of residential properties;

· the disposer must be a Malaysian Citizen and is the sole or joint owner of the said residential property;

· same as abovementioned, the residential property refer to as a house, a condominium, an apartment or flat in Malaysia, included a service apartment and a small or home office (SOHO) which is used as dwelling;

Subject to the following conditions:


i. the residential property being disposed of is not acquired by way of:


· transfer between spouses;

· gift between spouses, parent and child, or grandparent and grandchild; and


ii. the SPA 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. Or where there is no SPA, the instrument of transfer 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.


Where an individual disposes of more than three units of residential properties, the disposer may elect any three from the said disposals to be exempted. Once the decision is made, the election is final and irrevocable.


In the event the disposal of the residential property is a conditional contract which required approval from the Federal Government or a State Authority, the exemption shall only be applicable if:

  1. the SPA 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; and

  2. the approval by the Federal Government or State Authority is obtained on or after 1st June 2020.

A copy of the Order can be referred at here.

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