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Gazettes of PENJANA Initiative: P.U.(A) 216/2020, 217/2020 & 218/2020
MWKA ONLINE TALKS
SpeakerSARAH KAMBALIPartner
SpeakerMARCUS LEONGAssociate
ModeratorPHUI KAR LINGPupil in Chambers
Mon 17 August 20203:00pm (GMT +8)
mwka.com/talks
Gazettes of PENJANA Initiative: P.U.(A) 216/2020, 217/2020 and 218/2020
MWKA ONLINE TALKS
SpeakerSARAH KAMBALIPartner
SpeakerMARCUS LEONGAssociate
ModeratorPHUI KAR LINGPupil in Chambers
Mon 17 August 20203:00pm (GMT +8)
mwka.com/talks
About Us
● Welcome to MahWengKwai & Associates!
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● Established in 1985 by Dato’ Mah Weng Kwai, now a consultant with the firm.
● Medium-sized law firm with 22 lawyers and 19 staff.
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Sarah Kambali● Partner in our Real Estate Practice Group and Syariah Estate
Planning.
● Bachelor of Laws LLB (Hons) from the International Islamic University of Malaysia and Postgraduate Diploma in Syariah Law and Practice from the Universiti Technology MARA (UiTM).
● Admitted to the Malaysian Bar in 2007.
● Involved in Real Estate transactions and Syariah Estate Planning advice.
● Real Estate transactions include: drafting Sale and Purchase Agreement, transfer of property during lifetime and death, drafting tenancy agreement, reassignment or discharge of property.
● Syariah Estate Planning advice includes: advising on and drafting of Wasiat, preparation and execution of Hibah, understanding of Faraid.
● Member of the Selangor Bar Conveyancing Practice Committee.
Marcus Leong
● Associate in our Real Estate department
● Bachelor of Laws (Hons) from University of the West of England
● Called to the Bar of Malaya in 2018
● Master of Commercial Law in University of Malaya
● Conveyancing matters, drafting and preparing Sale and Purchase Agreements, Loan Documentation, Transfer of Properties
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Talk Points
● Introduction of the Gazettes issued.
● Real Property Gains Tax (“RPGT”) - the relief for residential sellers.
● Home Ownership Campaign (“HOC”) - its re-introduction and mechanics for stamp duty of transfer and loan.
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Introduction of the Gazettes Issued.
BY SARAH KAMBALIPartner, Real Estate Practice Group 17 August 2020
Introduction of Gazettes.
● On 28 July 2020, the Gazettes for the PENJANA Short-Term Economic Recovery Plan (ERP) on Home Ownership Campaign (“HOC”) and Real Property Gains Tax (“RPGT”) were issued by the Government.
● These Gazettes have stated the terms and conditions as well as the mechanics of the tax reliefs for HOC and RPGT.
● Today, we shall dive into the Gazettes to understand further on the application.
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Real Property Gains Tax
BY SARAH KAMBALIPartner, Real Estate Practice Group 17 August 2020
- The Relief for Residential Sellers
Real Property Gains Tax (“RPGT”)
● Real Property Gains Tax (“RPGT”) is an imposition of tax on chargeable gains for the disposal of real property on property owners or business owners.
● The Act the governs RPGT is the Real Property Gains Tax Act 1976.
● RPGT is one of the government’s tool to curb market speculation of buying and selling real estate property or shares of a real estate company.
● In our previous talk in July 2020, we had presented the tables of RPGT from previous years to the current 2020.
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Real Property Gains Tax (“RPGT”)
RPGT Rates from 2019 onwards.
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Gazette P.U.(A) 218/2020- RPGT
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Key points of P.U. (A) 218/2020
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- Citizens ONLY- 3 “residential” properties- 1.6.2020 - 31.12.2021
More than 3 Properties?- Vendor can choose which to
be exempted.- Choice is irrevocable.
CANNOT apply exemption if:-- disposer acquire property
through transfer of love and affection within 1.6.2020 - 31.12.2021.
Item 3, P.U.(A) 218/2020 Item 3(3), P.U.(A) 218/2020
Item 3(2)(b), P.U.(A) 218/2020
Residential Property
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- house- condominium unit- apartment / flat
Includes:- SOHO- for dwelling house
Item 2, P.U.(A) 218/2020
Execution and Stamping Timeline
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Sale and Purchase Agreement- execute: 1.6.2020 -
31.12.2021.- stamping: not later than
31.1.2022
No Sale and Purchase Agreement- executed: 1.6.2020 -
31.12.2021.- stamped: not later than
31.1.2022
Item 3(2)(c), P.U.(A) 218/2020
Approval of Federal/State Government
- Obtained: on / after 1.6.2020.
Conditional Contract
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Item 4, P.U.(A) 218/2020
Sale and Purchase Agreement- execute: 1.6.2020 -
31.12.2021.- stamping: not later than
31.1.2022
Submission Return / Information RPGT
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Item 5, P.U.(A) 218/2020➔ CKHT 1A➔ CKHT 3
◆ To include CF/CCC OR electric/water bil
◆ To fill in “P.U.(A) 218/2020”.
Do Purchaser’s Solicitors retain 3% Retention Sum?➔ Yes.
When to release Retention Sum?➔ CKHT 3 copy given.Section 13(6), (7) & 21B(5), RPGT Act
Section 21B(1), RPGT Act
Home Ownership Campaign
(“HOC”)BY MARCUS LEONGAssociate, Real Estate Practice Group 17 August 2020
- The Re-Introduction &
Mechanics.
Home Ownership Campaign (“HOC”)
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● Current Stamp Duty Rates:
Consideration / Purchase Price Stamp Duty (% of Purchase Price)
RM1 - RM100,000 1%
RM100,001 - RM500,000 2%
RM500,001 - RM1,000,000 3%
More than RM1,000,000 4%
Gazette P.U.(A) 217/2020 - SPA & HOC
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Key Elements of Gazette: 217/2020
● Residential Property under Home Ownership Campaign 2020/2021 (“HOC”).
● Sale and Purchase Agreement signed between 1.6.2020 - 31.5.2021
● Property is priced between RM300,000 to RM2.5 Million.
● The Property Developer grants at least 10% discount on the original Purchase Price of the property.
● The HOC transaction is between Individuals (Citizens of Malaysia) AND Property Developer (registered with the relevant body).
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Relevant Body:-- REHDA- SHAREDA- SHEDA
Application of Stamp Duty Exemption -
Transfer● Full Exemption of stamp duty for transfer of property priced between RM300,000 to RM1 Million.
● Stamp Duty chargeable at 3% after RM1 Million to RM2.5 Million
● Certification HOC 2020/2021 by relevant bodies is to be submitted to Inland Revenue Board for the purpose to obtain the exemptions.
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Relevant Body:-- REHDA- SHAREDA- SHEDA
Stamp Duty Exemption for P.U.(A) 217/2020
● Property at the Purchase Price of RM1,200,000
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Consideration / Purchase Price Without Exemption With Exemption
RM1 - RM100,000 (1%) RM1,000 -
RM100,001 - RM500,000 (2%) RM8,000 -
RM500,001 - RM1,000,000 (3%) RM15,000 -
More than RM1,000,000 (4%) RM8,000 RM6,000 (3%)
Total RM32,000 RM6,000
Gazette P.U.(A) 216/2020- Loan & HOC
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Key Elements of Gazette: 216/2020
● Loan Facility granted by list of financier in the Gazette [Item 2(1)(a) to (i)]
● Loan granted for the purchase of residential property under Home Ownership Campaign 2020/2021 (“HOC”).
● Property purchased priced between RM300,000 to RM2.5 Million.
● The Property Developer grants at least 10% discount on the original Purchase Price of the property.
● The Sale and Purchase Agreement signed between 1.6.2020 to 31.5.2021.
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Application of Stamp Duty Exemption -
Loan● Full Exemption of stamp duty for loan granted to finance the purchase of property priced between RM300,000 to RM2.5 Million.
● Certification HOC 2020/2021 by relevant bodies is to be submitted to Inland Revenue Board for the purpose to obtain the exemptions.
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Relevant Body:-- REHDA- SHAREDA- SHEDA
Questions?
Upcoming Talks
Date Topic Speakers
19 August 2020 (Wednesday)
How to Make a Pact in the Arena of Sports
Lesley Lim
26 August 2020 (Wednesday)
Understanding Performance Bonds Christine TohWong Sue Ann
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Notice: This presentation does not constitute legal advice and its contents should not
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and therefore will require specific legal advice. Feel free to contact us for
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Gazettes of PENJANA Initiative: P.U.(A) 216/2020, 217/2020 & 218/2020
MWKA ONLINE TALKS
SpeakerSARAH KAMBALIPartner
SpeakerMARCUS LEONGAssociate
ModeratorPHUI KAR LINGPupil in Chambers
Mon 17 August 20203:00pm (GMT +8)
mwka.com/talks
