In our previous article, “5 Legal Issues to Look Out for when buying and selling a property in Malaysia”, we have highlighted that a fifty per centum (50%) remission of stamp duty is permitted for transfers on the basis of ‘love and affection’ between parent to child and vice versa. This was gazetted under the Stamp Duty (Remission) (No. 7) Order 2002 [PU(A) 434/2002].
The latest gazette announced on 26 December 2019, known as the Stamp Duty (Remission) (No. 2) Order 2019 [P.U.(A) 369/2019], reflects that the remission of fifty per centum (50%) stamp duty shall only apply if the following conditions are met:
- The instrument of transfer of the immovable property is executed on or after 1 January 2020; and
- The recipient is a Malaysian citizen.
This latest change now limits the recipient to be a Malaysian citizen in order to enjoy the remission of stamp duty.
The gazette of the Stamp Duty (Remission) (No. 2) Order 2019 revokes the last gazette of the Stamp Duty (Remission) (No. 7) Order 2002 [PU(A) 434/2002] upon the operational date of the gazette; which will come into operation on 1 January 2020.
As such, it is important to note that for transfers effected by way of “love and affection” between parent and child; or vice versa, the recipient must be a Malaysian citizen in order to enjoy fifty per centum (50%) remission of stamp duty.