Advertisements
Skip to content

You also need to pay for stamp duty too, okay?

Posted in Property, KL / Selangor, and Starting Property Investing

It’s hard to save the first 10 percent downpayment for that first property. Somehow, everything seemed attractive at the shopping mall right? Actually, that’s not all we need to save. I think people buying their first property do realise that besides just the downpayment and lawyers’ fee, we have to also pay the stamp duty. The higher the property price, the higher the stamp duty. It is however not on a corresponding manner as the percentage to be paid would be come higher with the higher property prices. Nope, this is not just in Malaysia. It applies to the usual property markets of the world including our friendly neighbour Singapore too. In Malaysia For example, the below is the current percentage applicable.

COMPUTATION OF STAMP DUTY FOR TRANSFER OF REAL ESTATE (Sample calculation for a RM500,000 property as per image on left)

First RM100,000 – 1%

RM100,001 to RM500,000 – 2%

RM500,001 and higher – 3%

 

What happens when we buy a RM1,000,000 property instead? Refer to the image on your right. Instead of 1% throughout which would have meant just RM10,000 stamp duty or even a 2 percent throughout which would be just RM20,000 it will be RM24,000 when we buy a RM1,000,000 property here in Malaysia. I believe majority of Malaysians are buying the affordable properties priced below RM400,000. Thus the applicable stamp duty would only be up till 2 percent. There was a proposal in the Budget 2018 to have another tier. RM1,000,001 and above to have a 4 percent stamp duty. Well, this proposal is not going ahead. Perhaps the government is worried that people buying luxury properties would stop buying. When the market is slower than usual, together with some oversupply numbers, usually rationality wins. Here’s that link in TheStar that tell us about it. 

Conclusion, the richer a property buyer is (assumption that all those who could buy higher priced properties are richer than those who could not), the more tax is applicable. Frankly, I do not mind, if I am the one able to buy a RM1 million property, paying an extra few thousand ringgit is perfectly okay! As for now, my most expensive condominium is nowhere near the RM1 million tag. So, the debate of an additional percent does not apply to me. 🙂  Happy buying soon because if a proposal is to earn extra tax revenue for the government, it may just be delayed. Sooner or later, it should be coming back. By the way, the property stamp duty for buyers in Singapore is at 1% for first S$180,000 (RM544,000) and 2% for S$180,001 to S$360,000 (RM1.09 million) 3% applies for S$360,001 and above. Link to the calculation is here. Happy buying and well, paying the applicable stamp duties.

written on 20 Dec 2017

Next suggested article:  KL’s luxury condominium market? An update

Advertisements

Be First to Comment

Leave a Reply

%d bloggers like this: