Transfer of Property - from Parents to Children/ Husband to Wife (Stamp Duty Exemption)

Parents to children and spouses can transfer property without money consideration by way of love and affection.

The consideration stated in the Memorandum of Transfer (MOT) or Deed of Assignment will be ‘love and affection’.

Other family members can transfer property to another family member without money consideration by using a normal memorandum of transfer.

This consideration of love and affection applies only when the transfer is from parent to children and not from sibling to sibling or between any other family members. The Memorandum of Transfer (MOT) or Deed of Assignment still must be adjudicated and stamped.

The law does provide for a stamp duty exemption for a transfer of property by way of love and affection.

In contrast, pursuant to the Stamp Duty (Exemption) (No. 10) Order 2007, the law provides for stamp duty exemption for a transfer of property between family members by way of love and affection as follows:

 Transferor                         Transferee                Exemption Rate

Husband                            Wife                               100%

Wife                                   Husband                         100%

Mother and/or father         Child                                50%

Child                                   Mother and/or father      50%

In another way, it’s mean that if you are going to transfer the current property from your parents’ name to your own name, the stamp duty will be given 50% rebate. Between spouses will be given 100% rebate, which is so great because stamp duty fees can be painful.

Note that ‘Child’ means a legitimate child, a stepchild or child adopted in accordance with any law. Also, stamp duty is typically paid by the transferee, unless agreed otherwise by parties.

Here are some examples.

1. Property owned by Father. Father is getting older. And son wants to take over the property.

Property market value is RM400,000.

The actual stamp duty is RM7000.

If by way of love and affection, the stamp duty is RM3500 (50% x RM7000)

2. Property owned by the father (50% share) and mother (50% shares). Father will transfer his 50% shares to son. The mother remains the 50% ownership.

Property market value is RM400,000.

The property transfers on 50% shares. So, RM400,000/2 = RM200,000

The actual stamp duty for RM200,000 property is RM3000.

If by way of love and affection, the stamp duty is RM1500 (50% x RM3000)

3. Property owned by Husband. Husband wants to transfer his ownership to wife.

Property market value is RM400,000.

The actual stamp duty is RM7000.

If by way of love and affection, the stamp duty is RM0.00 (100% waived)

4. Property owned by Husband (50% shares) and Wife (50% shares). Husband wants to transfer his 50% shares to wife. Wife will own 100% shares after the transfer.

Property market value is RM400,000.

The property transfers on 50% shares. So, RM400,000/2 = RM200,000

The actual stamp duty for RM200,000 property is RM3000.

If by way of love and affection, the stamp duty is RM0.00 (100% waived)

5. Sister wants to transfer property to her brother.

According to the law, from sibling to sibling or between any other family members there is no stamp duty exemption. Therefore, the stamp duty will be charged in full amount.

Property market value is RM400,000.

The actual stamp duty is RM7000, and this is the amount to pay.

Extract from :
http://malaysiahousingloan.com/transfer-property-family-members-malaysia-love-affection-property-transfer/