Transferring property to a family member is a lot easier than you think it to be. A lot of times, people will think that it is a complicated matter that involves a lot of intricate procedures. Though the assumption is valid, it does not have to remain complex.
Memorandum of Transfer
There may be several scenarios where a family member may want to transfer their property to their other family member. If the parents wish to transfer their property to their children, they may do so by way of love and affection. No money consideration involved.
However, if it is a property that is being transferred by a sibling to another sibling, then they may have to pay stamp duty. There will be money involved in this case.
The consideration of love and affection applies only when the property is transferred from parents to children and not from sibling to sibling. It also does not apply to property transfers between other family members either. The memorandum of transfer (MOT) will still need to be adjudicated and stamped.
Malaysian law does provide a stamp duty exemption for a transfer of property by way of love and affection. There is an exemption rate:
| Husband to wife | 100% |
| Wife to husband | 100% |
| Mother or father to child | 50% |
| Child to mother or father | 50% |
Meaning to say, if you are to transfer your property under your name to your parent’s name, you will be entitled to a 50% rebate to the stamp duty. Likewise, if you are transferring your property under your name to your spouse, your stamp duty will be given a 100% rebate. It’s a good thing as stamp duty fees can be difficult to deal with sometimes.
When we refer to a child here, it usually refers to a legitimate child like your biological child. However, that can also include an adopted child with the proper paper works in place in accordance with the law. The stamp duty is often borne by the transferee unless agreed to by both parties.
Stamp duty rates
Property transfers between family members can be done without any price involved. Before the transfer becomes valid, the document still needs to be stamped. You will need to pay a stamp duty for that to happen. Tax depends on the value of the property being transferred.
| Property Value | Stamp Duty |
| First rm100k | 1% |
| Rm100,001 to rm500k | 2% |
| Rm500,001 to rm1mil | 3% |
| Subsequent amount | 4% |
The procedures of transferring property to your family member
The transfer process will first involve the adjudication of Form 14A or Memorandum of Transfer and Deed of Adjustment. You will then need to submit Form 14A of the National Land Code (Act 828).
For properties that have not yet been issued an individual title deed, the transfer of ownership is usually done through a deed called the Deed of Assignment. It’s a document that contains the details of the property, the property’s history/background, and the agreement between both the assignee and the recipient of the rights. If it is prepared by a lawyer, then it will be witnessed by the lawyer concerned.
Bottom Line
Transferring property to a family member is not necessarily difficult. With the right forms and understanding, you will be able to transfer your property to your family member in no time.
If you need any help in transferring properties between you and your family members, feel free to reach out to us for help. We will be more than happy to assist you with your property needs.
