Transfer of Property Between Family Members in Malaysia 2024
Recently, we’ve noticed a significant increase in inquiries about transfers of Property between family members here in Malaysia. Understanding the importance of this topic, we’re eager to share insights that will hopefully clear up any confusion and answer your queries.
Today’s discussion is especially relevant for transfers of property between parents and children, as well as between husbands and wives.
Drawing from various scenarios encountered by our clients, we aim to shed light on these common situations:
1. Legacy of an Aging Parent: Consider a typical Malaysian family scenario where an elderly father wishes to pass his property to his son, a common practice ensuring continuity of the family asset.
2. Jointly Owned by Parents: Imagine a property jointly owned by parents, each holding a 50% share. Here, the father decides to transfer his share to his son, while the mother maintains her half. This reflects the harmonious balance of familial asset distribution commonly seen in Malaysia.
3. Spousal Property Transfer: In a heartwarming turn of events, a husband plans to transfer his property wholly to his wife, exemplifying the deep trust and partnership that characterizes many Malaysian marriages.
4. Complete Ownership Shift: Visualize a situation where a property is co-owned by a husband and wife, each with a 50% share. The husband opts to transfer his share to his wife, resulting in her full ownership – a scenario not uncommon in Malaysia’s modern family dynamics.
5. In addition, we’ve also encountered cases where a sister wishes to transfer her property to her brother, showcasing the strong familial bonds in Malaysian culture.
It’s crucial to understand that in Malaysia, parents can transfer property to their children, and spouses to one another, as a gesture of love and affection without monetary consideration. This is typically reflected in the Memorandum of Transfer (MOT) or Deed of Giftt, stating ‘love and affection’ as the consideration.
For other family members, property can still be transferred without monetary consideration, using a standard memorandum of transfer. However, it’s important to note that the ‘love and affection’ consideration is exclusive to parent-child, spousal transfers, grandparents and grandchildren. In all cases, regardless of the familial relationship, the Memorandum of Transfer (MOT) or Deed of Gift must be duly adjudicated and stamped.
We hope this discussion helps our Malaysian readers in understanding the nuances of family property transfers in our unique cultural context.
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 the Stamp Act 1949, under the new Stamp Duty (Exemption) (No. 3) Order 2023, the law provides for stamp duty exemption for a transfer of property between family members by way of love and affection as follows:
a.Husband to Wife: 100% exemption, irrespective of property value.No change.
b.Wife to Husband: 100% exemption, irrespective of property value.No change.
c.Parent to Child and Vice Versa: 100% exemption on the first RM1 million, followed by 50% exemption on the excess.
d.Grandparent to Grandchild and Vice Versa: 100% exemption on the first RM1 million, followed by 50% exemption on the excess.
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 100% exemption on the first RM1 million, followed by 50% exemption on the excess.
Between spouses will be given full exemption, irrespective of property value, 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.
Let’s have some example.
1. Legacy of an Aging Parent: Consider a typical Malaysian family scenario where an elderly father wishes to pass his property to his son, a common practice ensuring continuity of the family asset.
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
2. Jointly Owned by Parents: Imagine a property jointly owned by parents, each holding a 50% share. Here, the father decides to transfer his share (50%) to his son, while the mother maintains her half. This reflects the harmonious balance of familial asset distribution commonly seen in Malaysia.
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
3. Spousal Property Transfer: In a heartwarming turn of events, a husband plans to transfer his property wholly to his wife, exemplifying the deep trust and partnership that characterizes many Malaysian marriages.
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
4. Complete Ownership Shift: Visualize a situation where a property is co-owned by a husband and wife, each with a 50% share. The husband opts to transfer his share (50%) to his wife, resulting in her full ownership (100%) – a scenario not uncommon in Malaysia’s modern family dynamics.
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
5. In addition, we’ve also encountered cases where a sister wishes to transfer her property to her brother, showcasing the strong familial bonds in Malaysian culture.
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.
So, that was my insight of memorandum of the transfer by way of love and affection, and I hope it helps.
As always if you need to know more about the topic I wrote or any question about the home loan, you can WhatsApp or call us at 012-6946746.
P.S. We have a new article that you might interested to read:
Transfer Property To Family Member
See you in my next article!
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It’s the property free of encumbrances then can transfer name? Tq
Hi Michelle,
Yes, free of encumbrances property can be transfer name.
The best way to understand your situation and easy for us to help you quickly and efficiently is to do consultation through the phone.
Please do not hesitate to contact us at +6012-6946746 if you need further information, thanks
David
hello, i have bought a property from my mother 10 years ago but I was not aware of this stamp duty exemption. Do you know if its possible to request for a refund on the stamp duty now? Thanks
I am malaysian but my son and husband are singaporeans. I have a property below RM500k. Can my son or husband inherit this property in future?
Hi
I’m own a house in KL, in joint name – Me, my sister and mother.
If i would like to withdrawn my name.
What is the faster and cheaper way?
Hope to hear from you soon.
Thanks!!
Hi there…if grandma tranfer name to grandchild how much is the fee??
Hi Rajeswari,
You can get a free quotation form from the below link:
https://malaysiahousingloan.net/legal-fees-calculator/
Hope it’s help,
Thanks
David
Hi
My mother got a house fully owned and want to transfer to my name. the house is no longer have any loan. what is the lawyer fees and stamp duty fees? the house market value is at 400k
Hi Brandon,
You can get a free quotation form from the below link:
https://malaysiahousingloan.net/legal-fees-calculator/
Hope it’s help,
Thanks
David
My brother want to transfer his property to me (Sister). But the Condo yet completed. Can do a transfer? His is a cash buyer.
Is it true that transfer of ownership have to be done after 5 years of staying in the property?
How much is the stamp duty?
Once the property completed, the transfer of ownership can be done.
However, there is a specific house like under 1Malaysia People’s Housing (PR1MA) program where there is restriction like moratorium (freeze) on the resale of homes or transfer of ownership within 5 -10 years.
And another reason people opt to transfer the property after five years is because of the property still charge to a bank.
If your property still charges to a bank, when there is a transfer of ownership, the existing loan needs to redo again.
And if the existing loan still under lock-in period, there will be a penalty fee. A penalty period usually will be over after 3-5 years.
So, many will opt to transfer their property after five years.
The stamp duty rates before 30th June 2019 is as below.
For the first RM100,000 is 1%
RM100,0001 to RM500,000 is 2%
RM500,001 to RM2,500,000 is 3%
RM2,500,001 onward is 4%
The stamp duty rates effective 1st July 2019 is as below.
For the first RM100,000 is 1%
RM100,0001 to RM500,000 is 2%
RM500,001 to RM1,000,000 is 3%
RM1,000,001 onwards is 4%
We hope this is helpful to you.
Melissa Lee
Online Mortgage Consultant
012-6946746
http://www.malaysiahousingloan.net
I bought a condo joint with my wife (my second property, wife’s first property). Recently we got a call from our lawyer office regarding the MOT are ready. Had received the quotation and it cost close to 30k in total.
Question is can these payment be put into existing housing loan? Not like everyone can afford to fork out a payment of 30k suddenly :-(
Thanks.
Hi Paul, thanks for the question.
One thing that most people don’t aware of when buying an under-construction property is the Memorandum of Transfer (MOT) cost comes later.
When initially you purchase the property from a developer, you don’t require to pay legal fees and stamp duty.
Most of the time, the developer will absorb the legal fee for the Sale and Purchase Agreement. And you might end up paying a disbursement fee of RM500-RM1000 only.
That’s the beauty of an under-construction property. You can buy a house, stay in it and pay the Memorandum of Transfer (MOT) cost later.
Where else, for a subsale property, all these costs might have to pay upfront before getting a house key.
Now, you’re facing a hefty Memorandum of Transfer (MOT) cost, RM30k, because the property title is issued.
The thing is Memorandum of Transfer (MOT) cost doesn’t happen overnight, and anyone who buys an under-construction property should prepare long before the Memorandum of Transfer (MOT) comes. Memorandum of Transfer (MOT) takes 3-5 years or more before you’re required to pay such money – an advance Memorandum of Transfer (MOT) saving should be done earlier.
Anyhow, I believe you are not the only one facing such issues.
Well, I guess you can try to get a top-up home loan or personal loan from the bank to cover the Memorandum of Transfer (MOT) cost.
The interest rates will depend on the banks. Typically, home loan interest rates will be much lower than a personal loan. So, it’s better to talk to your existing bank before going with a personal loan.
Pro-tip:
a. Since this is your wife’s first property, depending on the year she purchased ( you might want to check the guidelines with LHDN), for a first-time house buyer, there might be a stamp duty exemption. If there is, you can save 50% of the stamp duty you’re paying.
b. Every Memorandum of Transfer (MOT) has an expiry date before a developer can penalize you for late transfer. So, you want to check the expiry date and don’t delay in doing it. The penalty can cost you a few thousand more.
thanks.
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Hi, I am British and own an apartment in Malaysia. I would like to gift it to my brother who is Singaporean. Is this possible? And would it matter if he is my half-brother?
Hi, Ruiyan. Thanks for the question. The answer is below.
Based on the current guidelines, you can transfer (gift) to anyone you like including your half-brother.
However, since you’re a foreigner, so do your brother (Singaporean) there are a few guidelines that you have to fulfill.
But the main one will be the market value of the property. The property must reach a minimum market value before you can do the transfer.
For example, if the property located in Kuala Lumpur, the minimum requirement will be RM1million.
While in Selangor is RM1 million for Zone 3 property and RM2million for Zones 1 & 2.
For other states, I will suggest checking with the local land office on the guidelines.
If you are under Malaysia My Second Home (MM2H) program, the guidelines will be different, and the requirement will be lower too.
I hope this answers your question.
Thanks.
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Hi, Let say I own a condo of 500K for 3 years and it is still under loan repayment of 22 years.
If i wish to transfer the ownership to my father, what is the fee, requirements and any other things i need to be aware of?
Answer.
Hi, thanks for the question. So, I’ll straight answer your Q.
My answer will be based on the below assumption.
1. Both of you are Malaysian.
2. The property is under your name 100%.
3. The property is still under a bank loan.
4. The property is located in Selangor.
5. The property current market value is RM500,000
You can transfer the property to your father as long as your father is willing to take a new loan under his name or fully settle it.
You can do by way of Memorandum of transfer (for individual title property ) or Deed Of Gift (for master title property) by way of love and affection where entitles you to a 50% stamp duty exemption.
The cost of MOT legal fees is about RM12,000-12,600 (estimate), that’s included legal fees, disbursement fees, and stamp duty.
The stamp duty is with an assumption the property market value is RM500,000. If the value is higher, you might need to pay a higher fee.
There are another cost – loan agreement and valuation cost.
The loan agreement and valuation fees are the cost when your father gets a new home loan. It costs about 3% of the loan amount.
If your father doesn’t need a home loan and is going to settle the loan entirely, then this loan agreement and valuation cost are not relevant.
A word to the wise, you want to avoid doing by way of Sale and Purchase Agreement (SPA). The reason behind this is the cost of stamp duty is higher as you’ll not entitle to a 50% stamp duty exemption.
So, I hope this helps to clarify any doubt you have.
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Melissa Lee
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If a husband and wife are having joint name for a shop that is still under join name of bank loan, what will be the type of fees incur if wife wants to transfer the name and loan to husband?
Thanks for your question.
There are two ways to approach this.
A. By way of Sale and Purchase Agreement
You can do it by executing a new Sale and Purchase Agreement (SPA) with your husband. At the same time, your husband is applying for a new loan solely under his name.
The good thing about doing this way is it’s more straight forward. And it’s what most banks love. You show the bank the SPA; they will straight away process your case.
And when it comes to Real Property Gain Tax ( RPGT ), if there is any gain from the transaction, your husband might need to pay it. However, you can get a waiver for RPGT once in a lifetime.
Another thing to note is there will be a Seller SPA quotation and Purchaser SPA quotation to pay. The Seller SPA quotation will be an additional cost to you since there are no such fees when you do it by way of Memorandum of Transfer – the second option.
The most disadvantage of executing by way of SPA is the stamp duty. The stamp duty will be charged in full without exemption, unlike using the second option, you can get an exemption on stamp duty.
Also, since your husband is required to apply for a new shop loan, there is a new Bank loan agreement fee and Valuation Fee.
Conclusion:
The fees that incurred when do it by way of the Sale and Purchase Agreement (SPA).
a. Seller Sale And Purchase Agreement Fees
b. Purchaser Sale And Purchase Agreement Fees ( include property stamp duty)
c. Bank loan agreement fees
d. Valuation Fees
B. By way of Memorandum of Transfer (MOT)
Another way to go about it is by way of Memorandum of Transfer (MOT). MOT is our favorite way to go.
You have to execute a Memorandum of Transfer document stated selling your 50% shares to your husband. And, like by way of SPA, he needs to apply for a new shop loan too.
There is a fee charged for MOT, like SPA. But, this time, there is only one quotation to charged. Therefore, it is a saving for you.
Besides, under Love and Affection Stamp Duty Exemption, a stamp duty transfer between spouses is 100% exempted. So, another massive saving. Do take note, a property stamp duty can be costly and expensive.
Also, since your husband is required to apply for a new shop loan, there is a new Bank loan agreement fee and Valuation Fee.
When executing under MOT, you don’t need to pay any Real Property Gain Tax (RPGT). However, it is good to note this.
In the future, if your husband sells the shop. The RPGT calculation under your share will be calculated from Zero instead of the previous selling price. However, you can get a waiver for RPGT once in a lifetime.
Most banks will encourage you to do by way of SPA because it’s straightforward, and the bank policy urges them to persuade clients to do so; if not, they can’t proceed.
Only minority banks can accept by way of MOT, and a delicate law firm knows how to complete the case. We have the Team for it, the bankers and the lawyer. They can help you out.
If you’re interested, you can reach us at 012-6946746.
Conclusion:
The fees that incurred when do it by way of Memorandum of Transfer Fees (MOT).
a. Memorandum of Transfer Fees
b. Bank loan agreement fees
c. Valuation Fees
Please fill-up the form below if you desire to get any of the above quotations except for valuation fees.
https://malaysiahousingloan.net/legal-fees-calculator/
Thanks. I hope this helps.
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Melissa Lee
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Hi,
Just need to know what else I should do/procedure. Currently house under joint name between me and my wife. I want to transfer my 50% to my wife and I believe stamp duty is exempted under transfer of love in property. What else I need to do? Do I need to go land office to do this procedure or I need to engage lawyer to do MOT? Would think this is zero cost except some fee for the land office for some form to fill up.
Thanks and Regards,
Anthony
Hi Anthony,
Thank you for your questions. There are many questions, and I will try my best to reply to them.
I understand the property transfer confusion; I was too confused when I first know about the procedure.
Let me help answer your questions, and hopefully, I can steer you in the right direction.
First of all, it is correct that the stamp duty for property transfer between spouse is exempted; we called this property transfer transaction as Love and Affection transfer.
And Yes, you can do a property transfer between spouse if you fulfil the criteria.
One crucial piece of information before doing a property transfer is whether the property still charged to a bank.
✅If the property free from encumbrance or no bank loan. You can directly go to the land office to do it or hire a lawyer to do it for you.
You can walk into the land office and get the information and steps to do it. It might take a few trips, fill up a few forms and provide some documents.
On your own, the cost of doing it will be cheaper than hiring a lawyer because you are using your own time and discovering on your own to complete the transaction.
I can’t give you complete information on how to do it as I never do it independently. I prefer to hire a lawyer to do it.
✅If the property charged to a bank or you are still servicing a loan for the house, your wife must refinance the property to another bank.
You can’t complete a property transfer without getting a new bank loan as the existing loan has changed, so you must apply for a new bank loan.
Due to the property still charged with a bank, you are required to appoint a lawyer to do it for both the property transfer and refinancing.
When it comes to dealing with banks, you need a lawyer to do the work.
So, yes. You can’t do it yourself.
The above advice is based on the assumption; the property is under individual or strata title.
If the property under a master title, it will be more complicated. I’d suggest you have a conversation with us so that we can give proper advise.
And if you want to know about the property transfer cost, you can click the link below and request a quotation from us.
https://malaysiahousingloan.net/legal-fees-calculator/
https://bit.ly/2JkS7WB
You can reach us at 012-6946746.
I hope the answer can provide you with some clarity.
Thanks.
Hi. I just bought a property under my name. Loan is under me as well. My agent tells me I cant add my girlfriend’s name as we arent married and I applied for the loan on my own. When we do get married, will the MOT to transfer half of the house be exempted 100%?
Hi, thanks for the question.
Indeed, some banks might not prefer to give out loans to boyfriend and girlfriend relationship customer. But, not all. Some are still acceptable.
Furthermore, the bank prefers to give out loans to customers who have a stable relationship like husband and wife, parents, children, and siblings.
For the second question, the answer is Yes. You can do a property transfer to your wife, and if the transfer is by way of love and affection, the property stamp duty is exempted 100%.
However, you must pay for legal fees and other disbursement fees involved in doing this transaction.
And if the property is still under a bank loan, you must do a refinancing as the ownership has changed. There will be another cost like legal fees, disbursement fees, stamp duty and valuation fees to prepare the refinancing loan agreement.
I hope you find some clarity in the answer.
Thanks!
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Online Financial Consultant
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Hi,
i boght a landed house back in 2009 (loan under my name) but the S&P under my name and my mum name.
i completed the house payment, and my mum want to transfer the proprty title to my name only.
Is the MOT will be 50%?
Hi Raju,
Thanks for visiting our website and sending us this question.
Yes, You can easily do a Memorandum of Transfer (MOT) from your mom to you.
We also assume the property title is issued to do a Memorandum of Transfer.
When you do an MOT, you only needs to transfer 50% of mom shares, and your share will have remained.
This means the stamp duty and lawyer fees will be calculated based on 50% of the property market value.
In addition, because this is transfer property from mother to son, you will be entitled to a 50% stamp duty exemption.
So, let’s do some calculations on the stamp duty.
Let’s assume the property market value is RM500,000.
Mom will transfer 50% of the property to you, which is RM500,000 / 2 = RM250,000.
Therefore, we only will calculate RM250,000 stamp duty.
For the first RM100,000 x 1% = RM1000
The next RM150,000 x 2% = RM3000
The total stamp duty is RM4000
Under the love and affection stamp duty exemption, you will only pay 50% of the stamp duty.
In this case, RM4000 x 50%= RM2000.
You only needs to pay RM2000 stamp duty for this transfer.
And saves RM2000.
For more information, you can read these two articles.
https://malaysiahousingloan.com/transfer-property-from-mother-to-son/
Transfer of Property Between Family Members in Malaysia – Love and Affection Property Transfer
If you have any further questions feel free to WhatsApp or call us at +6012-6946746.
If you need a Memorandum of transfer quotation, please click here, and we will get back to you as soon.
https://bit.ly/2JkS7WB
I paid off may bank loan of a property I bought, This property has no title yet and I dont have a copy of Deed of Reassignment. How can I get a copy?
Hi, can a Commercial shop lot transfer to my son as a gift with exemption of stamp duty ?
Thanks.
Thank you for reaching out with your question regarding the transfer of a commercial shop lot to your son as a gift and the applicability of stamp duty exemption.
I am pleased to confirm that it is indeed possible to transfer a commercial shop lot to your son as a gift with an exemption of stamp duty.
However, please be advised that the exemption is capped at the first one million Ringgit Malaysia (RM1 million).
Should the value of the property exceed RM1 million, the balance amount exceeding RM1 million will be subject to a 50% exemption on the applicable stamp duty.
To illustrate, if the value of the property is RM1.5 million, the first RM1 million will be fully exempted from stamp duty, and the remaining RM500,000 will be eligible for a 50% exemption on the applicable stamp duty.
I hope this clarifies your query. Should you require any further assistance or have additional questions, please do not hesitate to contact us.
Melissa
Online Mortgage Consultant
Whatsapp Us : https://wa.me/+60126946746