Below are the latest RPGT and Stamp Duty rates in 2019
RPGT 2019
| Year | Individual Citizen | Individual Non-Citizen | Companies |
| Up to 3 Years | 30% | 30% | 30% |
| Up to 4 Years | 20% | 30% | 20% |
| Up to 5 Years | 15% | 30% | 15% |
| Up to 5 Years | 5% | 10% | 10% |
STAMP DUTY SCALE 2019
| First RM100,000 | 1% |
| Next RM 400, 000 | 2% |
| Next RM500,000 | 3% |
| RM1,000,000 above (New Level, effective on 1st of July 2019) |
4% |
The Stamp Duty for inheritance via Will or Distribution Act 1958/Intestate Succession Ordinance 1960 or Faraid is only at nominal value of RM10.00 per transfer.
There will be no RPGT payable for inheritance via Will or Distribution Act 1958/Intestate Succession Ordinance 1960 or Faraid because it is treated as if there is no sale, no gain.
Please refer to the case study below for the differences between transferring property to person(s) who is not an inheritance heir via law during life time and under a Will
CASE STUDY
Ah Beng wants to transfer his property that was bought on July 2000 for RM500,000 to his brother on March 2020 with the market value at RM 1.5 million.
| If Ah Beng chooses to; | Lifetime Transfer | Will |
| RPGT | The RPGT payable will be; 5% (since it is above 5 years) RM 1.5million- RM 500,000 =RM 1 million (total gained) 5% of RM1 million=RM50,000. |
NO RPGT payable for inheritance via Will/testamentary trust as it is treated as if there is no sale/gain |
| Stamp Duty | The Stamp Duty will be based on the Current market value of the property when the transfer is made (RM 1.5million) First RM100,000 x 1% = RM1,000 Next RM400,000 x 2% = RM8,000 Next RM500,000 x 3% = RM15,000 Next RM500,000 x 4% = RM20,000 =RM 44, 000. |
Nominal value at RM10 per transfer (Item 32(i) Schedule 1, Stamp Act 1949). |
| Total Cost involved | RM 50, 000 + RM44, 000 = RM 94, 000.00 | Nominal fee for Stamp Duty; RM 10.00 |
However, normal rates of the Stamp Duty and RPGT is applicable when the property is sold to a purchaser (third party) under the instruction in the Will or to pay debts of the estate (stated under Real Property Gain Tax Act of 1976).
Please refer to the case study below for your better understanding
CASE STUDY
Ah Beng passed away on March 2020. He instructed his Executor to sell his property under his Will. The property was bought by Ah Beng at RM 500, 000 on July 2000 and it was sold to Ah Wong on December 2020 at RM 2.5 million by the Executor.
The normal Stamp Duty rate applies; based on the market value of the property when the transfer is made
The RPGT payable is based on the market value of the property at the date of death VS the current market value of the property/sale price (whichever higher)
*Thus, the price of the property when it was bought by the deceased is not relevant on the calculation of RPGT in this situation
Price of the property when bought by Ah Beng on July 2000: RM 500, 000 (which is not relevant in this situation)
Market Value of the property when Ah Beng died on March 2020: RM 1.5 million
Market Value of the property when the property was sold to Ah Wong: RM 2.5 million
| RPGT | The RPGT payable will be; 30% (since it is sold within first 3 years after the death) RM 2.5 million (sold price) - RM1.5 million market value of the property at the date of death) = RM 1 million 30% of RM1 million=RM300,000 |
| Stamp Duty | The Stamp Duty will be based on the current market value of the property when the transfer is made (RM 2.5million) First RM100,000 x 1% = RM1,000 Next RM400,000 x 2% = RM8,000 Next RM500,000 x 3% = RM15,000 Next RM1,500,000 x 4% = RM60,000 = RM84,000 |
| Total Cost involved | RM300,000 +RM 84,000= RM384,000 |
CONCLUSION
Why Pay More now when you can save those costs? You can help your prospects to save on property transfer costs by writing a Will! Besides, the process of transferring the property under a Will is also simpler, hence this gives more reason to your prospects to get their Will done. Nonetheless, please take note that the normal rates of the Stamp Duty and RPGT is applicable when the property is sold to a purchaser (third party) under the instruction in the Will or to pay debts of the estate
**Want to know more on the Stamp duty and Tax implication on Living Trust and U-Declare?? Stay tuned for our upcoming Circulars!
Disclaimer: This article is given purely for information drawn from other sources and Rockwills make no representations, express or implied, thereon and shall not be responsible for the accuracy of such information.