As our parents grow old, they would want to transfer their property to us; if you are still searching for how to do the transfer, I hope this article- transfer property from mother to son is useful.
Recently, we received a question about transfer property from mother to son.
Here is the question.
This is my answer to Raju question.
Thanks for visiting our website and sending us this question.
First of all, let me elaborate in detail on Raju story.
Raju bought a house in 2009.
The property is under his name and mother. Both own 50-50 shares of the property.
So, Raju owns 50% of the property and Mom own 50% of the property.
Now, mom wanted to transfer her 50% shares to him. And by the end of the transaction, Raju will own 100% of the property.
Yes, Raju can easily do a Memorandum of Transfer (MOT) from his mom to him.
We also assume the property title is issued to do a Memorandum of Transfer.
When Raju does an MOT, he only needs to transfer 50% of mom shares, and his 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, he will be entitled to a 50% stamp duty exemption.
So, let’s do some calculations on the stamp duty.
For example, we assume the property market value is RM500,000.
Mom will transfer 50% of the property to Raju, 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, Raju will only pay 50% of the stamp duty.
In this case, RM4000 x 50%= RM2000.
He only needs to pay RM2000 stamp duty for this transfer.
He saves RM2000.
LOVE AND AFFECTION STAMP DUTY EXEMPTION
If you never heard about love and affection stamp duty exemption. Let me share here.
The law provides a stamp duty exemption for a transfer of property by way of love and affection.
In contrast, under 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:
In another way, it means if there is a transfer from your parents’ name to your name (children) or vice versa, the stamp duty exemption of 50% will be applied.
In addition, if there is a transfer between spouses, the stamp duty exemption will be 100%, which is so great because stamp duty fees can be painful to pay.
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 the parties.
DISCHARGE OF CHARGE
In Raju’s question, he also mentioned, “I completed the house payment.”
I hope this also means he had fully settled the bank loan.
If so, he can proceed to do the property transfer from mom to him without any lawyer by walking into the land office.
But, provided he had completed the process of Discharge Of Charge from the bank.
After you have fully settled the loan with the bank, this is a process where you will need to hire a lawyer to retrieve all the bank’s documents and title copy from the bank.
This process we call “Discharge Of Charge.” You will need a lawyer to do this.
If Raju hasn’t done this, he needs to proceed with it before doing the property transfer.
However, Raju has another option to do the property transfer from mom to him. He can hire a lawyer to help him with the transfer.
He even can ask the lawyer to do the Discharge Of Charge and the transfer together. But of course, he will need to pay some fees to the lawyer.
Anyway, that is my answer to Raju question.
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