REHDA Bulletin
November 2002

EXPLANATORY NOTES ON STAMP DUTY EXEMPTION FOR LOW COST HOUSES

The Stamp Duty (Exemption) (No.39) Order 2002 gazetted vide PU.(A) 425 dated 24 October 2002 provides for stamp duty exemption for the purchase of a low cost house. "Low cost house" is defined as a unit of house built within a Low Cost Housing project approved by a State Government or the appropriate authority, in respect of the Federal Territory of Kuala Lumpur or Labuan and -

(a) if situated in Peninsular Malaysia, sold at a price not exceeding RM42,000.00; or

(b) if situated in Sabah, Sarawak or the Federal Territory of Labuan, sold at a price not exceeding RM47,000.00.

The Order is deemed to have come into operation on 1 July 2002. The documents which are exempted from stamp duty are:

(a) All instruments of Sale and Purchase Agreement executed between the purchaser and the developer on or after 1 July 2002.

(b) All instruments effecting the transfer of title of the property from the developer or the registered land owner to the purchaser named in the Sale and Purchase Agreement in paragraph (a).

(c) All instruments in the nature of security executed between the purchaser named in the Sale and Purchase Agreement in paragraph (a) and a bank or financial institution or employer under an employee housing loan scheme for money advances to finance the purchase of the property.

The Stamp Duty Office has issued the following guidelines on the operation of the Order (No. Ruj. LHDN.01/34/42/68-180-1(28/02) dated 8 November 2002):

The developer is required to issue a certificate as in Appendix A* to certify that the said property is within a Low Cost Housing project approved by a State Government or the appropriate authority, in respect of the Federal Territory of Kuala Lumpur or Labuan. A copy of the letter of approval must be attached. (*A specimen copy of Appendix A may be obtained from the Stamp Duty Office or any REHDA Branch Office).

For purpose of the exemption, the Sale and Purchase Agreement, Loan Agreement or Deed of Assignment as security need not be submitted to the stamp duty office. The lawyer handling such transaction may endorse on the document a note of the exemption if he is satisfied that such exemption applies.

Transfer of Land (KTN 14A) - The transfer document is required to be submitted to the stamp duty office for endorsement of exemption by the Deputy Collector of Stamp Duty. An adjudication fee of RM10.00 is payable. The following documents must also be enclosed:

(i) a copy of the Sale and Purchase Agreement;
(ii) Certificate duly certified by the Developer;
(iii) 3 copies of Form PDS 15 [Declaration under Section 5 of the Stamp Act 1949].

Charge Document (KTN 16A) - The charge document is required to be submitted to the stamp duty office for endorsement of exemption by the Deputy Collector of Stamp Duty The following documents must also be attached:

(i) a copy of the loan agreement;

(ii) a duly certified copy of the Certificate issued by the Developer;

(iii) a copy of the Sale and Purchase Agreement.

APPLICATION FOR REFUND OF STAMP DUTY PAID - In cases where stamp duty has been paid, application for refund may be made to the respective stamp duty office where the documents were stamped. Please contact the nearest stamp duty office for any further clarification.