The Malaysian government has recently announced several changes to the country’s economic and tax policies in the Budget 2023. One of the proposals in the budget relates to the stamp duty treatment for the transfer of property by way of love and affection between family members. This article will explore the current position of stamp duty rates, the proposed changes as well as the implication of such proposal.
CURRENT POSITION
As of 1 January 2019, the stamp duty rate for the instrument of transfer of property is based on a tier system which can be seen as follows:-
However, there are full or partial stamp duty exemptions for transfers between spouses[1], parents and children[2] :
It is essential to note that the 50% remission of stamp duty for transfers between parents and children only applies if it operates as a voluntary disposition inter vivos from the transferor to the transferee and the transferee must be a Malaysian citizen[3]. Further, a ‘child’ means a legitimate child, a step child or child adopted in accordance with any law[4].
It is worth highlighting that under the current position of law, the transfers of property between siblings, grandparents or grandchildren are subject to the full stamp duty rate.
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