deed of assignment stamp duty malaysia

RECENTLY PUBLISHED

Popular articles.

• e-Invoicing in Malaysia: A Complete Guide For Your Business
• Malaysia e-Invoicing FAQs: Everything You Need to Know
• Important Terms in Malaysia e-Invoicing
• Reasons for Rejection and Cancellation of e-Invoice in Malaysia
• e-Invoice Exemptions in Malaysia: A Comprehensive Guide
• e-invoice Model in Malaysia: Benefits, Requirements and How to Get Started
• Data Security and Privacy Monitoring in Malaysia: How IRBM Leads the Way
• Transaction Types of e-Invoicing in Malaysia: A Comprehensive Guide
• Steps for submission, validation, and issuance of e-invoices in Malaysia

Stamp Duty in Malaysia: Rates, Exemptions & Penalties

Updated on : Apr 18th, 2024

16 min read

In Malaysia, stamp duty is a required tax on legal documents and instruments of transfer, serving to generate government revenue and regulate economic activities. It prevents fraud, supports public services, and helps control speculative behaviour in the property market by increasing transaction costs. 

This dual function reinforces legal integrity, stabilizes sectors like real estate, and contributes to the country's overall economic governance and development. Here is everything you need to know about Stamp Duty in Malaysia, including rates, exemptions and penalties.

What is Stamp Duty?

Stamp duty is a tax imposed on various legal, commercial, and financial documents, commonly called "instruments." These instruments can include agreements, contracts, deeds, licenses, and other written documents specified by law. 

Stamp duty aims to validate and formalize these documents and ensure they are legally recognized.   Failure to pay stamp duty or properly stamping documents within the required timeframe may result in legal consequences, such as penalties or invalidation of the document.

Stamp Duty Amount 

The amount of stamp duty payable typically varies depending on the nature of the instrument and, in some cases, the value of the transaction or property involved. There are generally two types of stamp duty:

• Ad Valorem Duty: This type of stamp duty is calculated as a percentage of the value of the transaction or property. The rate of duty may vary based on the nature of the instrument and the consideration involved.
• Fixed Duty: Fixed duty imposes a specific amount of stamp duty, irrespective of the value of the transaction or property. It is typically applied to certain types of instruments, such as agreements or licenses.

Types of Documents Subject to Stamp Duty

Stamp Duty is not imposed on the transactions themselves but rather on the documents that represent or record these transactions. Here are types of documents subject to Stamp Duty in Malaysia

• Sale and Purchase Agreements : These are agreements for the sale of immovable property, such as land and buildings.
• Transfer Documents : Documents that signify the transfer of ownership of property, such as grant of probate or letters of administration.
• Loan Agreements : Documents pertaining to the borrowing of money, where the terms and conditions of the loan are outlined.
• Mortgage and Security Documents : Instruments that create a security interest in property to secure a loan.
• Leases and Tenancies : Agreements for leasing or renting out property, both commercial and residential.
• Share Transfer Documents : Documents involved in the transfer of shares in Companies.
• Debentures : Instruments acknowledging or creating debt.
• Partnership Agreements : Documents that establish the terms of a partnership between individuals or entities.
• Memorandum of Understanding (MoU) : Non-binding documents that outline the intentions of parties to enter into a contract.
• Insurance Policies : Policies that are related to certain types of insurance coverage.
• Trust Deeds : Documents establishing a trust for managing assets for beneficiaries.
• Powers of Attorney : Legal documents authorizing one person to act on behalf of another.

Stamp Duty Rates

The rates of duty vary based on the nature of the instruments and the transaction values. Here's a consolidated overview of the stamp duty rates in Malaysia:

Stamp Duty on Sale and Purchase Agreements (SPA)

RM10 per agreement. This is paid for the document on a fixed amount basis. This is separately charged at a fixed amount other than the stamp duty on the Instrument of transfer.

Stamp Duty on Instruments of Transfer

This is calculated for a Memorandum of Transfer (MOT) or Deed of Assignment (DOA) as per the price/ consideration. It is calculated based on a tiered system:

For Foreign companies:  Stamp duty rate is 4%  

Stamp Duty on Service Agreements and Loan Agreements

A stamp duty of 0.5% is applicable on the value of services or loans. However, stamp duty may be remitted more than 0.1% for certain instruments.

Stamp Duty on Shares and Securities

Stamp duty payment and procedures in malaysia.

Stamp duty must be paid within 30 days from the date of execution of the property transaction. Stamp duty can be paid in 2 major ways

• STAMP Certificate:  An electronic stamp certificate, reflective of the duty paid, is issued when stamping applications are processed online via the LHDNM website ( https://stamps.hasil.gov.my ). 
• Compound Duty: Compound duty, combining ad valorem and fixed duty as prescribed by Section 9 of the Stamp Act 1949, is applicable to specific types of instruments, including:
• Policies of insurance
• Contract notes
• Memorandum of Association & Article of Association
• TNB Electric Supply form

Stamp Duty Exemptions and Special Cases

The government occasionally provides exemptions, reductions, or remissions on Stamp Duty for certain types of transactions or for specific groups of people.

Here are the major exemptions and remissions.

• First-time homebuyers purchasing homes valued at RM500,000 and below can enjoy a full stamp duty exemption until the end of 2025.
• Residential properties purchased between RM500,001 to RM1 million will receive a 75% stamp duty exemption only until 31st December 2023.
• Starting from 2024, first-time homebuyers purchasing homes above RM500,001 will not benefit from any stamp duty exemption.
• Effective 1 January 2024, foreigners (non-citizens and foreign-owned companies, excluding Malaysian permanent residents) will be subject to a flat rate stamp duty of 4% on property transfer instruments, as announced in Budget 2024.
• In Budget 2024, it was announced that a fixed stamp duty fee of RM10 will replace the previous variable rate for real estate transfer documents between loved ones.
• This change applies to cases where beneficiaries are relinquishing their rights to eligible beneficiaries following a will, Faraid, or the Distribution Act 1958.

Late Payment of Stamp Duty

An instrument can be stamped within 30 days of its execution in Malaysia or within 30 days after it arrives in Malaysia if executed outside the country. Failure to stamp within this timeframe incurs a penalty:

• RM25.00 or 5% of the deficient duty, whichever is higher, if stamped within 3 months after the deadline;
• RM50.00 or 10% of the deficient duty, whichever is higher, if stamped after 3 months but within six months after the deadline;
• RM100.00 or 20% of the deficient duty, whichever is higher, if stamped after six months from the deadline.

These penalty rates have been in effect since January 1, 2003.

Consequences of Non-Compliance with Stamp Duty Regulations

There are two major consequences of non-compliance with stamp duty.

• Validity of Unstamped Instruments : While unstamped instruments, such as contracts, may still be legally enforceable, but not necessarily valid in court proceedings.
• Effectiveness of Stamped Instruments : Certain instruments, particularly those involving transfers of tangible assets like real estate or shares, must be properly stamped to be legally effective. 

Understanding Stamp Duty in Malaysia is crucial for anyone involved in property or financial transactions. This legal obligation not only affects your financial planning but also ensures the validity of your documents. Failing to comply can lead to penalties, affecting your finances and legal standing.

INTRODUCTION

Stamp duties are imposed on instruments and not transactions. An instrument is defined as any written document and in general,- stamp duty is levied on legal, commercial and financial instruments. The person liable to pay stamp duty is set out in the Third Schedule of Stamp Act 1949. The Assessment and Collection of Stamp Duties is sanctioned by statutory law now described as the Stamp Act 1949.

TYPES OF DUTY

1. Ad Valorem Duty

The rate of duty varies according to the nature of the instruments and the consideration stipulated in the instruments or the market value of the property. The imposition of ad valorem duty (that is, according to the value) is on:

• Instruments of transfer (implementing a sale or gift) of property including marketable securities (meaning loan stocks and shares of public companies listed on the Bursa Malaysia Berhad), shares of other companies and of non-tangible property (e.g. book debts, benefits to legal rights and goodwill).
• Instruments creating interests in property (e.g. Tenancies and Statutory Leases)
• Instruments of security for monies, including instruments creating contracts for payment of monies or obligation for payment of monies (generally described as `Bond`)
• Certain capital market instruments (e.g. Contract Notes)

2. Fixed Duty

Duty is imposed without any relation to the consideration paid or amount stated in the instrument. The imposition of fixed duty is on:

• A number of other legal, commercial, mercantile or capital market instruments (e.g. Power or Letter of Attorney, Articles of Association of a Company, Promissory Notes, Policy of Insurance etc); and
• A duplicate or a subsidiary or a collateral instrument when it can be shown that the original or principal or primary instrument has been duly stamped.

INSTRUMENTS LIABLE TO STAMP DUTY

Instruments liable to stamp duty are those listed in the First Schedule of the  Stamp Act 1949 .

PwC Trust Builders Challenge

The Building Trust Awards

2023/2024 Malaysian Tax Booklet

27th Annual Global CEO Survey - Malaysia

Asia Pacific's Time

Global Entertainment & Media Outlook 2022–2026

Value Creation in Deals

NewLaw: Optimising your legal function

Annual Report

Transparency Report

The New Equation

Loading Results

No Match Found

Basis of taxation

Stamp duty is chargeable on instruments and not on transactions.

An unstamped or insufficiently stamped instrument is not admissible as evidence in a court of law, nor will it be acted upon by a public officer.

Assessment and payment of stamp duty can be made electronically via the Stamp Assessment and Payment System.

Rates of duty

The rates of duty vary according to the nature of the instruments and transacted values. Generally, transfer of properties can give rise to significant stamp duty:

a. Properties (other than shares, stock or marketable securities)

1. Other than foreign companies, non-citizens and non-permanent residents

2. Foreign companies, non-citizens and non-permanent residents

Flat rate stamp duty of RM4 per RM100 or part thereof (w.e.f 1 January 2024)

b. Non-listed shares, stock or marketable securities

RM3 for every RM1,000 or any fraction thereof based on consideration or value, whichever is greater. The Stamp Office generally adopts one of the 2 methods for valuation of unlisted ordinary shares for purposes of stamp duty:

-    net tangible assets; or -    sale consideration.

c. Shares or stock listed on Bursa Malaysia

RM1.50 for every RM1,000 or any fraction thereof based on the transaction value.  However, stamp duty in excess of 0.1% is remitted for instruments of contract notes executed on or before 13 July 2023 until 12 July 2028, with maximum stamp duty payable of RM1,000 per contract note.

d. Listed marketable securities

RM1 for every RM1,000 or any fraction thereof based on the transaction value, with maximum stamp duty payable of RM200 per contract note.

e. Service Agreements and Loan Agreements

Stamp duty of 0.5% on the value of the services / loans. However, stamp duty may be remitted in excess of 0.1% for the following instruments:

1.   Service agreement

2.   Loan agreement / loan instrument

Malaysian Ringgit loan agreements generally attract stamp duty at 0.5% However, a reduced stamp duty liability of 0.1% is available for Malaysian Ringgit loan agreements or instruments without security and repayable on demand or in single bullet repayment.

Stamp duty on foreign currency loan agreements is generally capped at RM2,000.  W.e.f 1 January 2024, this cap is removed.

Instruments executed in Malaysia which are chargeable with duty must be stamped within 30 days from the date of execution. When the instruments are executed outside Malaysia, they must be stamped within 30 days after they have first been received in Malaysia.

The penalty imposed for late stamping varies based on the period of delay. The maximum penalty is RM100 or 20% of the deficient duty, whichever is higher.

Relief / Exemption / Remission from stamp duty

Examples of the exemptions, remissions or reliefs of stamp duty available are as follows:

1.  Merger and acquisition

Relief on the transfer of the undertakings or shares under a scheme of reconstruction or amalgamation of companies (conditions apply).

• Relief on the transfer of property (excludes transfer of business) or shares between associated companies , where either company owns 90% or more of the other company, or where a third company owns 90% or more of both associated companies (conditions apply).

2.   Financing instrument

• Stamp duty exemption on loan / financing agreements executed from 1 January 2022 to 31 December 2026 between MSMEs and investors for funds raised on a peer-to-peer platform registered and recognised by the Securities Commission (SC). 
• Stamp duty exemption on instrument of agreement for a loan or financing in relation to a Micro Financing Scheme (approved by the National Small and Medium Enterprise Development Council) between a borrower and a participating bank or financial institution.
• Stamp duty exemption on all loan or financing instruments in relation to the Professional Service Fund for an amount up to RM50,000 between a borrower and Bank Simpanan Nasional.
• Stamp duty exemption on all instruments of an Asset Sale Agreement & Asset Lease Agreement executed between a customer and a financier made under Syariah law principles for renewing any Islamic overdraft/revolving financing facility , provided the instrument for existing facility is duly stamped.
• Stamp duty on any instruments of an Asset Lease Agreement executed between a customer and a financier made under the Syariah principles for rescheduling or restructuring any existing Islamic financing facility is remitted to the extent of the duty that would be payable on the balance of the principal amount of the existing Islamic financing facility, provided the instrument for existing Islamic financing facility has been duly stamped.
• Stamp duty exemption on all instruments relating to the purchase of property by any financier for the purpose of leaseback under the principles of Syariah or any instrument by which the financier shall assume the contractual obligations of a customer under a principal sale and purchase agreement.
• Stamp duty exemption on loan or financing agreements executed from 1 July 2021 to 31 December 2024 in relation to restructuring or rescheduling of business loans due to the inability of the borrower to comply with existing repayment schedule consequent to deteriorating financial conditions.

3.   Instrument of transfer

• Remission of 50% of stamp duty chargeable on the instrument of transfer of immovable property operating as voluntary disposition between parent(s) and child and vice versa, executed before 1 April 2023 and   provided that the recipient(s) is a Malaysian citizen. 
• Stamp duty exemption on the instrument of transfer of property (executed from 1 April 2023) by way of love and affection between parents and children, grandparents and grandchildren, limited to the first RM1 million of the property’s value, provided the recipients are Malaysian citizens. The balance of the property’s value is given 50% remission on the ad valorem stamp duty imposed. 
• Exemption for instruments of transfer of immovable property operating as voluntary disposition between husband and wife.
• Stamp duty exemption on all instruments of transfer of land, business, asset and share in relation to the conversion of a conventional partnership or a private company to be a limited liability partnership .
• RM10 fixed duty for instrument of transfer of any property by way of release or renunciation by a beneficiary of a deceased estate to another beneficiary entitled under the same estate (w.e.f 1 January 2024).

4.  Purchase of first residential property

• Stamp duty exemption on the instrument of transfer and loan agreement for purchase of first residential property through the Malaysian Home Ownership Initiative (i-Miliki) under the Home Ownership Programme 2022/2023.

Note 1: Purchaser or co-purchasers are Malaysian citizens

5.  Abandoned housing projects

•  Stamp duty exemption on instruments executed by a rescuing contractor or a developer approved by the Minister of Housing and Local Government to carry on rehabilitation works for an abandoned project . The instruments are loan agreements approved by the approved financier and instruments of transfer for the purpose of transferring revived residential property in relation to the abandoned project which are executed by 31 December 2025.
• Stamp duty exemption on instruments executed by an original purchaser , whose name is stated in the Sale and Purchase Agreement in relation to an abandoned project , or his beneficiary. The instruments are loan agreements approved by the approved financier and instruments of transfer which are executed by 31 December 2025.

6.   Capital market

• Stamp duty exemption on specified instruments for the purpose of a securitisation transaction.
• Stamp duty exemption on all instruments relating to the issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase debentures or Islamic securities approved by the SC and the transfer of such debentures or Islamic securities.
• Stamp duty in excess of RM200 is remitted for instruments of contract notes relating to the sale of shares, stocks or marketable securities  in companies incorporated in Malaysia or elsewhere between a local broker and an authorised nominee on behalf of a foreign broker.
• Stamp duty exemption on contract notes for sale and purchase transaction of structured warrant or exchange-traded fund approved by the SC, executed by 31 December 2025.

Contents page

PwC Malaysia

General enquiries, PwC Malaysia

Tel: +60 (3) 2173 1188

© 2019 - 2024 PwC. Published by PricewaterhouseCoopers Taxation Services Sdn Bhd (464731-M) Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, P.O. Box 10192, 50706 Kuala Lumpur, Malaysia Tel: 03-21731188 Fax: 03-21731288

Your browser is ancient! Upgrade to a different browser or install Google Chrome Frame to experience this site.

Selangor, Kuala Lumpur and Johor Law Firm - Deed of receipt and reassignment in Malaysia by the lawyer

Deed of receipt and reassignment in malaysia.

Deed of Receipt and Reassignment is to be treated as the same process as Discharge of Charge except that this will not include the redemption of Original Title from the Bank. This is because when the Purchaser/Borrower bought the property, the Individual Title or Strata Title is yet to be issued so they will use Deed of Assignment by way of security in order to protect the beneficial interest of the Bank for the assistance given to the Purchaser/Borrower in purchasing the property. Normally, the Purchaser/Borrower will signed the Deed of Assignment documents together with Power of Attorney upon receiving the loan from the bank. These documents worked as a protection for the Bank to sign the Perfection of Charge documents on behalf of the Purchaser/Borrower (if the Purchaser/Borrower is missing or do not have money to pay the fees) once the Individual or Strata Title has been issued. Therefore, once the Purchaser/Borrower already signed this Deed of Receipt and Reassignment documents, it can be a proof that the Purchaser/Borrower already settled the repayment of the housing loan with the bank and the Power of Attorney given to the Bank earlier will also be revoked. Most importantly, once the Individual Title or Strata Title has been issued later, the Purchaser/Borrower must prove to the Perfection of Transfer’s solicitor that the loan is fully settled by showing this Deed of Receipt and Reassignment documents and Perfection of Charge should not be done anymore. As a result, upon the registration of the Purchaser’s name on the Title by Perfection of Transfer, the Purchaser/Borrower can collect the Original Title for their safekeeping and don’t have to forward the same to the Bank anymore. • Basic process for Deed of Receipt and Reassignment 1. Deed of Receipt and Reassignment documents signed by Purchaser/Borrower 2. Deed of Receipt and Reassignment signed by Bank 3. Stamp relevant documents at LHDN 4. Revoke Power of Attorney at High Court 5. Purchaser/Borrower can collect all Original Documents for their safekeeping • Documents needed for Deed of Receipt and Reassignment:- 1. Identity card of Purchaser/Borrower 2. Prove of settlement of the housing loan from the Bank (if any) 3. Other relevant documents • What type of property under Deed of Receipt and Reassignment - master title property Disclaimer All data and information provided on this site are for informational purposes only. HS LIM & CO makes no representations as to the accuracy, correctness, completeness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis. If you are in any doubt, please contact us for further information.

PROPERTY & PROBATE LAWYER MALAYSIA: TAM YUEN HUNG & CO.

Professional & Affordable Property and Probate Lawyer in Kuala Lumpur & Selangor, Malaysia. Contact Our Property And Probate Lawyers Today At 011-2644 4268 for free Legal consultation now.

Law On Transfer of Property Between Family Members In Malaysia

Property Transfer By Way Of Love and Affection

We believe many people out there are thinking about transfer of property between family members by way of love and affection, ie without any payment of money or monetary consideration.

So how do you transfer property between family members in Malaysia?

Some common scenarios are as follows:-

• the parents wish to give properties to their children; or
• husband needs to transfer half share of the matrimonial house to the wife.

Memorandum of Transfer/Deed of Assignment

There is no requirement to sign a Sale and Purchase Agreement in such situation but there is necessity to sign the Memorandum of Transfer (MOT) where the property in question has title or Deed of Assignment where the property in question has no title or is under master title.

The consideration stated in the MOT or Deed of Assignment would be “love and affection” or “ kasih sayang ” in Bahasa Melayu.

The MOT or Deed of Assignment still has to be stamped. However, such transfer of property between parent and children or married spouses is subjected to exemption.

The transfer of property between parent and children or married spouses attract no gains tax because the recipient/transferee is deemed to have acquired the property in question at the same price as acquired previously by the donor/transferor. So there is no gain. However, note that it is still necessary to file the relevant CKHT forms with the Inland Revenue.

The professional fee will be based on the monetary consideration or the market value of the property in question. Where the consideration is for love and affection, the professional fee chargeable will be based on the market value of the property in question.

Get Free Legal Quotation From Our Property And Conveyancing Lawyer Now And We Will Send You The Quotation In Less Than 2 Working Hours Via WhatsApp/SMS.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Notify me of follow-up comments by email.

Notify me of new posts by email.

• Transferring a Property NOT pursuant to a sale – can it be done?

by Donovan & Ho (BD) | January 19, 2022 | Real Estate

• Print Friendly

We often receive queries from individuals where a property was jointly purchased with loved ones or business associates, or even with an ‘ex’ and subsequently, one party wishes to transfer their portion of the property so there will now be just one owner. Another common scenario is where a husband / parent wishes to transfer the property to his wife or children while still alive.

In this article, we explore some frequently asked questions relating to situations that do not involve a sale of the property.

What are the documents needed to effect such a transfer?

An “MOT”, also known as “Instrument of Transfer”, is the legal instrument prescribed by the National Land Code 1965, which is used to effect the transfer of property with individual title or strata title. For a property without individual title or strata title issued, a Deed of Assignment (by way of transfer) is used to effect the transfer of the property.

Is a Sale and Purchase Agreement needed if no money is changing hands?

A Sale and Purchase Agreement (SPA) is not needed if no money is changing hands. However, it can be useful to have a simple SPA drawn up on a ‘friendly-party basis’ to capture the transfer, especially for the future disposal of the property to a bona fide third party purchaser.

What if the property is still subject to bank loan / charged to the bank?

If the property is still charged to a Bank, the outstanding loan must first be fully redeemed with cash OR from a completely new loan facility. Getting a new loan could mean a new (and lower) loan interest rate, but it will also involve additional legal fees and stamp duty (0.5% on the borrowed amount) on the loan documents.

The solicitor will then simultaneously register both the bank charge documents (for the new loan) and the MOT at the land office. It is also likely that the bank will insist for an SPA to be signed.

What is the time needed for such a transfer?

The whole process might take between 3 to 4 months, or more, depending on the tenure type of property, i.e. freehold or leasehold, whether there is a loan to redeem, or whether a developer is involved the property where the strata title is not yet issued.

Will state authority consent be required for such a transfer?

For a leasehold property, state authority consent will be required for the transfer. The state authority consent will take between 2 to 3 months depending on the location of the property.

What is the stamp duty involved in such a transfer?

You are also required to pay for the stamp duty to effect the transfer. The rates of stamp duty under the Stamp Act 1949 are as follows: –

• First RM100,000                                                 –           1%       
• Next RM400,000                                                 –           2%         
• Next RM500,000                                                 –           3%       
• Amounts above RM1,000,000                           –           4%

The stamp duty will be based on the property’s current market value which will be valued by the Inland Revenue Board and not based on original purchase price .

However, there are full or partial stamp duty exemptions if the transfer is done between spouses, parents and children:

Be mindful that transfers between siblings, friends, boyfriends and girlfriends, or grandparents are subject to the full stamp duty rate.

Will the transferor need to pay RPGT on such a transfer?

Under the Real Property Gains Tax Act 1976 (RPGT Act), there is a 100% RPGT exemption in the transfer of property between family members by way of love and affection between spouses, parents and children. The transferor is deemed to have received “no gain and suffered no loss” and not subject to any RPGT.

Apart from the above, any forms of transfer between siblings, friends, boyfriends and girlfriends, or grandparents are not entitled to apply for the RPGT exemption.

What is the RPGT implication to the transferee / recipient in the subsequent disposal?

The transferee should be aware that he is deemed to have acquired the property at the acquisition price that was previously paid by the transferor . Therefore, upon subsequent disposal by the transferee , he might be exposed to significant capital gains, especially if the property was previously owned by the transferor for a long amount of time.

It is always advisable to seek professional legal advice to first determine your exact situation after conducting the updated searches and a review of your documents, in order to assess the multiple variable factors and costs that would apply to your specific situation.

This article was written by  Shawn Ho  (Partner) & Suzanne Fam   (Senior Associate) from the property & tax  practice group of Donovan & Ho.   Shawn leads the  corporate  practice group of Donovan & Ho, and has been recognised as a Notable Practitioner, whilst the firm has been recognised as a Notable Firm for Corporate and M&A by Asialaw Profiles 2020 and 2021.  We are also ranked as a Recommended Firm by IFLR1000 2020 and 2021.

Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysia start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds. We also advise on property transactions and real-estate related tax planning. Feel free to  contact us  if you have any queries.

Most Recent

• Case Spotlight: Can a Construction Sub-Contractor be sued by the Employer for Negligence?
• Probation and Probationers in Malaysia
• Case Spotlight: When Does A Transfer Amount to Constructive Dismissal?
• What is Willful Blindness?
• Case Spotlight: Communicating Sick Leave and Producing MCs

This Month's Top 10 Most Viewed Articles

• What payments are subject to EPF?
• When Can Your Employer Deduct Your Salary?
• Should I delay the ‘perfection’ of strata title?
• Medical Board Outs: Employees with Medical Conditions
• Best Practices for a Domestic Inquiry
• Transfer of Employees in Malaysia
• Caveats: What you need to know
• Guide to Malaysian Employment Law
• The Myth of 3 Warning Letters
• #LegalFlix Videos (16)
• Corporate and Commercial (117)
• Dispute Resolution (118)
• Donovan and Ho updates (17)
• Employment Law (277)
• Real Estate (41)

Latest Articles

Residential Tenancy Act: A Curse or A Blessing?

by DNH (BD) | April 8, 2022 | Real Estate

LinkedIn Facebook Twitter Gmail Print Friendly Residential Tenancy Act: A Curse or A Blessing? In recent years, many have pushed for a piece of legislation that would govern conflicts arising […]

Selling & Buying Property: Costly mistakes to avoid in your Offer Letter

by Donovan & Ho (BD) | February 23, 2022 | Real Estate

LinkedIn Facebook Twitter Gmail Print Friendly The process of purchasing a property can be rather daunting as the contents of the offer letter is the first legal document you’ll need […]

Differences between buying an Auction Property vs Secondary Market Property

by Donovan & Ho (BD) | August 20, 2021 | Real Estate

LinkedIn Facebook Twitter Gmail Print Friendly Differences between buying an Auction Property vs Secondary Market Property (Sub-sale) in Malaysia When purchasing a residential property, the common question that comes to […]

Stamp Duty Malaysia On Instrument of Transfer

Stamp duty is a tax based on specific tiers, with its own percentage for each level. The tiers are as follows (with effect from 2019 ):

Stay with us! Now, what does that mean in practice? Let’s explore a simplified example. A property valued at RM500,000 today would be liable for charges across the first two tiers that we mentioned above.

Stamp duty would be charged according to 1% on RM100,000 of value and 2% on RM400,000 of value . So what will the stamp duty be?

RM1,000 stamp duty owed on the first RM100,000 value (1% x RM100,000)

RM8,000 stamp duty owed on the next RM400,000 value (2% x RM400,000)

Thus,   RM1,000 + RM8,000 = RM9,000 stamp duty owed in total

If that all sounds complicated, don’t worry, a quick Google Search for a stamp duty calculator will lead you right to a nifty tool to do the number crunching for you!

[PropertyTip]The stamp duty for a Sale and Purchase Agreement is often mistaken for the stamp duty for Instrument of Transfer. The stamp duty for the SPA is only RM10 per copy, while the stamp duty for MOT and DOA is calculated according to a fee structure of 1% to 4%.[/PropertyTip]

Stamp Duty Malaysia On A Loan Agreement

It’s also important to factor in the stamp duty owed for any loan agreement which may be entered into as part of a property purchase .

As an important legal document, the loan agreement is also liable for stamp duty.  Stamp duty on a loan agreement is a flat 0.5% rate , applied to the full value of the loan.

So, for a property priced at RM500,000, you would typically apply for a 90% loan (RM450,000) – as 10% of the property price will be for the down payment , which you would need to fork out yourself.

100% loan is possible, but uncommon for most people.

Thus, if you take out a loan of RM450,000 to cover your hypothetical property purchase above, you’re liable for a stamp duty of RM2,250 on that loan (0.5% x RM450,000).

Let’s go through this step-by-step. For your hypothetical property worth RM500,000, this is how you calculate your total stamp duty for the instrument of transfer AND loan agreement :

Stamp duty for instrument of transfer + Stamp duty on loan agreement = Total stamp duty to be paid

[(First RM100,000 x 1%) + (Next RM400,000 x 2%)] + 0.5% of loan amount (RM450,000) = (RM1,000 + RM8,000) + (0.5% x RM450,000) = RM9,000 + RM2,250 = RM11,250

Remember this stamp duty calculation as we’ll explain below how the stamp duty exemptions come into play 😉

Stamp Duty Exemption For 2023

Announced during the revised Budget 2023, for first-time homebuyers who purchase a home valued at RM500,000 and below, full stamp duty exemption will apply until the end of 2025.

While residential properties purchased worth between RM500,0001 to RM1 million will get a 75% stamp duty exemption up until 31st December 2023.

Relevant Guides:

51 essential property jargon to know for buying a house in malaysia, how to calculate your affordability – now vs later, memorandum of transfer (mot) and 4 important documents in malaysia.

Disclaimer:  Information provided on this website is general in nature and does not constitute legal advice. PropertyGuru will endeavour to update the website as needed. However, information can change without notice and we do not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time. Whilst every effort has been made to ensure that the information provided is accurate, individuals must not rely on this information to make a legal decision. Before making any decision, we recommend you consult a legal professional to take into account your particular situation and individual needs. PropertyGuru does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, PropertyGuru, its employees do not accept any liability for any error or omission on this web site or for any resulting loss or damage suffered by the recipient or any other person.

Latest stories

Four-cornered fight in kuala kubu baru by-election.

HULU SELANGOR, April 27 — The Kuala Kubu Baru parliamentary by-election will see a four-cornered fight between Pakatan H...

China is the enemy of the world and has nobody to blame but itself

Secretary of State Antony Blinken’s multi-day trip to China this week caps a particularly busy stretch of meetings between US and Chinese officials. Treasury Secretary Janet Yellen was in Beijing earlier this month where she delivered remarks about establishing a floor underneath the US-China relationship and was photographed drinking a beer at a local brewery. On April 5, US and Chinese defence officials held maritime talks for the first time in three years. And on April 16, US Defense Secretar

Prince Edward and Duchess Sophie Feel Disappointed by King Charles Royal Title "Snub"

The "chosen ones" are reportedly sad they didn't get new roles after Prince William and Kate Middleton's latest appointments.

Maggie Cheung Ho Yee to make TVB comeback?

The Hong Kong actress is said to star in a drama by "The Queen of News" producer

Harrowing Video Shows A Black Man’s Last Words As Police Knelt On Him

The body camera footage shows police waiting about six minutes after Frank Tyson became unresponsive before starting CPR.

Jennifer Lopez Won't Stop Wearing These Divisive Jeans

She's been spotted in them three times in the last two weeks.

Prince William Shares Princess Charlotte's 'Favorite Joke' at the Moment, and It's a Total Classic!

"That’s the one I hear a lot at home at the moment," the Prince of Wales said of the knock-knock joke

Zahid and Muhyiddin say public interest convinced them to end defamation suit

KUALA LUMPUR, April 26 — Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi will no longer pursue his defamation suit a...

Zambry: Pro-Israel professor's statement dangerous; there are better local professors than him

PUTRAJAYA, April 26 — Minister of Higher Education Datuk Seri Zambry Abd Kadir today lambasted controversial American ac...

Arne Slot: I want Liverpool job and am confident deal can be done

Arne Slot expects to be appointed Liverpool’s next manager after telling Feyenoord he wants to leave for Anfield next season.

Pilot popping the question sends flight attendant running up the aisle

A tearful pilot proposed to a flight attendant as romance took flight during an airplane proposal. CNN’s Jeanne Moos reports.

Hamas officials say group willing to disarm if Palestinian state is established

Some Hamas officials are signaling that the militant group could give up armed struggle against Israel if the Palestinians get an independent state in territories captured by Israel in the 1967 war.

Jacky Wu and his "Mr. Player" team filmed in Penang for four days

The Taiwanese host is back in Penang again after filming in the island back in 2015 and 2019

Erik ten Hag: Marcus Rashford abuse is wrong but he must accept share of blame for failings

Erik ten Hag has told Marcus Rashford he must take his share of the blame for Manchester United’s struggles despite offering the striker his full backing in the face of “months of abuse”.

Brielle Biermann Shows Off Glittering Diamond Engagement Ring While Posing in a Cheeky Knit Bikini

The 27-year-old TV star is enjoying some fun in the sun

Toddler Tells Mom She Hears Monsters in Her Bedroom. Beekeeper Discovers Over 50,000 Bees in the Wall (Exclusive)

The 100-year-old wall had months of bees' work hidden throughout its attic and walls

Bowie Wu to be the oldest Asian concert performer at The Londoner Arena

The 92-year-old singer to hold his concert packed with guest stars this 18 May

‘One guy’ is blocking release of Israeli hostages, says White House

Yahya Sinwar, the Hamas leader, is blocking a deal to release Israeli hostages, the Biden administration has said.

Iranian rapper Toomaj Salehi sentenced to death for protesting

Dissident rapper Toomaj Salehi has been given a death sentence for his involvement in the widespread protests that swept Iran in 2022, according to his lawyer.

A clothing designer says Taylor Swift wearing her skort was the 'ultimate karma' against brands that have ripped her off

Blogilates founder Cassey Ho is an influencer, fashion designer, and Swiftie. She's ecstatic that Taylor Swift has now worn one of her creations.

Assignment of Debt – What You Need to Know

By aqila zulaiqha zulkifli ~ 23 june 2023.

Share this article:

Aqila Zulaiqha Zulkifli

Email Me  |  View Profile

Occasionally, to ensure liquidity and to reduce financial risk, a creditor may assign its rights to a debt repayment to another party. Such an arrangement is known as the assignment of debt.

An assignment generally means the transfer of contractual rights and liabilities to a third party without the concurrence of the other party to the contract. [1] The assigning party is known as the assignor, whereas the recipient party is known as the assignee.

Once an assignment occurs, the assignee stands in the exact position as the assignor and has the legal right to a debt, other remedies therein, and even the power to discharge the debt. The debtor must then, make all payments to the assignee, and not the assignor. In fact, if the debtor pays the assignor without the consent of the assignee, the debtor may risk having to pay the assignee all over again. [2]

An assignment of debt is governed by Section 4(3) of the Civil Law Act 1956 (the “Act”) (cited with approval in the Federal Court case of UMW Industries Sdn Bhd v Ah Fook [3] , in which, the elements of a statutory assignment of debt can be summarized as follows:

• the assignment must be in writing under the hand of the assignor (and not, i.e the agent of the assignor);
• the assignment must be absolute and not by way of charge only; and
• the express notice in writing must have been given to the person liable to the assignor (i.e the debtor).

The effect of a statutory assignment is that the assignee possesses the legal right to the debt and the right to sue the debtor in respect of the debt without needing to join the assignor. [4]

However, rest assured, an assignment that is not in compliance with Section 4(3) of the Act is not automatically invalid. A non-statutory assignment could still be valid in equity [5] , though the assignee would have to join the assignor in the proceeding, either as a plaintiff or defendant [6] . This is to ensure a just disposal of the action, by ensuring that all relevant parties are before the Court so that the assignor would not make a claim against the debtor in respect of the same debt.

As such, in conclusion, before accepting an assignment of debt, it is prudent for an assignee to ensure that the elements in Section 4(3) of the Act abovementioned are fulfilled. If the assignment is meant to be absolute, such terms should be clearly reflected in the deed of assignment, or the assignee runs the risk of being crippled in a legal proceeding to recover the debt in the absence of the assignor.

[1] United General Insurance Co Sdn Bhd v Progress Credit Sdn Bhd [1988] 2 MLJ 297

[2] malayawata steel berhad v government of malaysia & anor [1980] 2 mlj 103, [3] [1996] 1 mlj 365, [4] mbf factors sdn bhd v tay hing ju (t/a new general trading) [2002] 5 mlj 536, [5] khaw poh chhuan v ng gaik peng & ors [1996] 1 mlj 761 (fc), [6] chan min swee v melawangi sdn bhd [2000] 7 clj 1.

RESOURCES /

• Recent Reported Cases
• Talks by Thomas Philip
• TP Legal Clinic