Yeo Law Chambers

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Question:

 

“Hi Lawyer Yeo, I own a property in Johor Bahru and I have completed paying off the housing loan, and just received the original title deed from the bank’s solicitors.”

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“I’m currently considering two options: drafting a will to ensure my daughter inherits the property in the future or directly transferring the property to her now since this is my only asset.”

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“Could you please advise on the quantum of the legal fees and stamp duty chargeable if I choose to transfer the property to her now? and any other costs which may be incurred, if the transfer is done through the inheritance process/ will after my passing?”

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“I would be grateful if you could advise me on the above matter. Thanks.”

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Answer:-

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Direct Transfer Property to the Daughter: Benefits & Costs

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1.     If you decide to transfer property to your daughter immediately, there are generally two main costs involved: first, the legal fees for handling the transfer (payable to your solicitors), and second, the stamp duty (payable to the Inland Revenue Board of Malaysia).

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2.     The legal fees for preparing the transfer documents are calculated based on the market value of the property. According to the Solicitors Remuneration Orders 2023, the current rate are:-

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  • 25% for the first RM500,000
  • 1% for the next RM7 million
  • For amounts exceeding RM7.5 million, the fee cannot exceed 1%, subject to negotiation between the client and solicitor.

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3.    As for stamp duty, one benefit of transferring property between family members is the possibility of qualifying for stamp duty exemptions, depending on the latest government policies.

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4.    Currently, according to the Stamp Duty (Exemption) No. 3 Order-PU.(A) 178/2023), full stamp duty exemption applies to transfers between spouses, parents and children, and grandparents and grandchildren for the first RM1 million of the property’s value. For amounts exceeding RM1 million, a 50% stamp duty reduction applies.

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5.    However, transfers between aunts, uncles, nieces, nephews, and siblings remain subject to full stamp duty with no exemptions whatsoever.

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6.     Therefore, the advantage of an immediate transfer is that the overall cost can be lower since you’ll mainly pay legal fees for the transfer, excluding any miscellaneous expenses.

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7.     The process of transferring property is relatively quick. In the absence of any restrictions on the property, the entire transfer can typically be completed within approximately three months.

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Benefits and Costs of Using a Will

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8.     If you choose to transfer property through a will, there are two additional costs to consider besides the legal fees for the actual transfer. The first is the lawyer’s fee for drafting the will, and the second is the fee that will be paid from your estate to obtain a Grant of Probate after your passing.

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9.     While transferring property through a will may incur higher overall costs, this does not mean it is an inconvenient or unwise method for passing on property to your children.

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10.     The key benefit of using a will is that it allows you, as the property owner, to maintain full control over the property throughout your lifetime. Unlike an immediate transfer, where ownership is relinquished, a will ensures that you retain the ability to benefit from the property until your death.

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11.     Moreover, the cost of drafting a will is relatively affordable (typically a few hundred dollars), and the process is quick, usually taking only 1-2 weeks. For elderly property owners or those owning more than 1 house and concerned about future family disputes, using a will provides greater security and peace of mind.

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The above is the legal information we would like to share with our readers today with regard to property transfer in Malaysia. If you have any legal questions about this legal process, you can contact us via WhatsApp: https://wa.link/q3kmv5

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You can learn other legal information from our website:https://www.yeolaw.my/

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