The world’s economy has changed dramatically in the last few months of the year 2020 due to a rare deadly disease, a coronavirus pandemic, which resulted in tragically multiple crises – a health crisis, financial crises and collapse in commodity prices faced by many countries. In taking an inclusive and holistic approach to propel forward the nation’s economic growth, our government has introduced a National Economic Recovery Plan which focuses on various sector.

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One of the incentives focuses on the property sector, which the Government has reintroduced the House Ownership Campaign (‘HOC’) as imposed in the year 2019. This incentive allows for property purchasers to enjoy an exemption for stamp duties on the instrument of transfer and loan agreement for any purchase of a residential property made between 1st June 2020 until 31st May 2021 under the HOC priced between RM300,000.00 to RM2.5 million and subject to at least 10% discounts provided by the developer.

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For easy reference, these are the main conditions to the tax exemptions under the HOC:-

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Meanwhile, the followings illustrate the exemption of the stamp duty for each instrument:-

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Besides benefitting the property purchasers, the Government has also come out with an incentive that benefits the vendors, which allow for an individual Malaysian citizen to apply for an exemption from the payment of the chargeable gains arising from the disposal of a residential property on or after 1st June 2020 until 31st December 2021. The Sale and Purchase Agreement/ Instrument of Transfer shall be stamped not later than 31st January 2022.

 

However, this exemption is only limited to the disposal of three (3) units of residential property per individual during the prescribed period. So what does ‘residential property’ means? Residential property means the following which is owned by an individual, jointly or solely for the use only as a dwelling house:- 

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1. A House;

2. A Condominium Unit;

3. An Apartment;

4. A Flat;

5. A Service Apartment; and

6. A Small Office Home Office (SOHO).

 

Furthermore, it shall be applicable on condition that the residential property disposed of is not acquired with the said period either by way of:-

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Transfer between Husband & Wife;

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A gift between Husband & Wife / Parent & Child / Grandparents & Grandchild

where the donor is a citizen

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With the implementation of the tax incentives, this would stimulate the property market and provide financial relief to property purchasers as well as the sellers. For any further clarifications, kindly contact us at T: +603 6730 6088 / E: ainin@antplaw.com / general@antplaw.com.

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