Property and divorce lawyer Johor Bahru

If you own a real property, you might have wondered if it’s possible to give it as a gift, whether it be to a family member, charity, or other organization.

Many people gift real property after they pass away by naming individuals or organizations to inherit their property in their estate plans. However, property can also be given when you are alive (inter vivos) in a way similar to how you would give any other type of present, like for a special occasion or holiday.

There are a number of ways you can gift real estate, so let’s explore some of the things you should know about it in this post.


Tip 1: Why would I gift my real property?

People choose to gift your real property and often due to following reasons:-

  1. no intention of making a will;
  2. will only becomes effective when will maker passed away;
  3. their heirs do now wish to go through a complicated process in probate court;
  4. money saving (stamp duty exemption available for close relatives);
  5. ill or elderly;
  6. wish to purchaser another property and don’t want to be tied to the existing houses;
  7. Converted into Singapore citizens and intend to purchase a HDB in Singapore (it is a pre-condition that the intended buyer need to give up all their properties in overseas);
  8. Renounced Malaysian citizenship and intend to migrate to other country;
  9. The divorcing spouse intends to settle the division of property before filing for a divorce (the spouse still enjoying a stamp duty exemption when the marriage is still subsisting).

In any event, gift your property when you are still alive is still a better idea of estate planning. More often than not, it is also cheaper compared to making a will applying probate, or even applying letters of administration when there is no will behind .If the house is appreciate over the years, the cost incurred can be higher.


Tip 2: How a property can be gifted?

In sale and purchase agreement, you give away your property in return for money. Conversely, to gift a property without any monetary consideration will be done via a Deed of Gift. A memorandum of transfer will need to be signed by stating that the property is transacted through “kasih sayang”


Tip 3: Can a gift be revoked?

A gift, once completed, is binding on the donor. It cannot be revoked by him, unless the property has been taken from him by fraud or undue influence.

Under Section 340 of the National Land Code 1965, when the title or interest of any person or body for the time being registered as proprietor of any land, or in whose name any lease, charge or easement is for the time being registered, shall, subject to the following provisions of this section, be indefeasible, unless it can show circumstances of fraud, misrepresentation, forgery , insufficient or void instrument or unlawfully acquired through any written laws.


Tip 4: How much cost I need ?

The legal fees for the deed of gift will be subject to the share you want to disposed of based on the current market value of the property, which is no different when you are buying a house.

The valuation will be conducted by JPPH (instead of the bank) to ascertain the stamp duty payable. The stamp office shall issue a valuation notice (Notis Taksiran), and you shall pay the stamp duty within 30 days. Therefore, you need to know your current market value and do budgeting before gifting your property. You may refer to the current “Cukai Harta” stated on your assessment receipt issued by your town council every year, or look for a registered valuer for a quote. Nevertheless, both are not conclusive as the ultimate decision is left to the government to decide. The lawyer will ask for a deposit upon engagement and the full fees need to be paid after the valuation is obtained.


Tip 5: Any exemption available?

Stamp duty exemptions (Exemption/Remission of Stamp Duty) (not applicable for foreign citizen).

Condition:

  • limited to the the first one million ringgit or less from the value of the immovable property and fifty per centum of the stamp duty chargeable on an amount in excess of one million ringgit shall be imposed on the balance amount of the value of the immovable property which is more than one million ringgit)
  • the instrument of transfer of the immovable property is executed on or after 1 April 2023
  • Recipient is Malaysian
  • The following relationships are entitled to a stamp duty’s waiver
  1. spouse-100% stamp duty exemption with nominal stamp duty of RM10.00 (with proof of marriage certificate)
  2. parent to child-100% stamp duty waiver with nominal stamp duty of RM10.00 (with proof of birth certificate)
  3. child to parent-100% stamp duty waiver with nominal stamp duty of RM10.00 (with proof of birth certificate)
  4. Grandchild–100% stamp duty waiver with nominal stamp duty of RM10.00 (with proof of birth certificate)

*Siblings and other relatives such as uncles, uncles, aunts, etc. are not entitled and must pay full stamp duty.


Tip 6: Can my gift property be taxed?

Real Gain Property Tax 

The RPGT is chargeable when there is a gain. Since there is no money consideration involved, then no RPGT is payable. Nevertheless, if the transaction were other than the abovementioned relationships or between a foreigner, RPGT is still chargeable based on the market value based on the disposal date and previous acquisition date.


Tip 7: Are the loan fully paid off?

Please aware that you cannot gift your property if the loan have not fully paid off. Consult your existing bank for a refinance.

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