Currently, the property my father purchased is under my aunt's name (freehold individual title). Wanted to transfer the title to my brother (never own any property before).

What is the best way to do it? What are the cost involved?

Understand that transfer between indirect family will still be charged under RPGT and MOT Stamp duty.

METHOD A:

Just do normal MOT transfer under Love and Affection and pay for the RPGT and MOT Stamp duty (if done this way the valuation will be based on market price?)

Method B:

My brother proposed to purchase the property from my aunt at a markdown SPA price (market value 600k) at RM280k only in order to enjoy the first home owner waiver of stamp duty for SPA and loan.

After that, when bank disburse money to my aunt, she will purchase another property with cash under my brother's name. Does that actually work?

Pls let me know if i doesn't clarify enough points here. Will add on.

Hope to get some advise and guidance on this issue.

I dont think Method B is allowed. it would be pretty obvious something hanky panky going on.

That's what I though of. The bank disburse the money to my aunt and i think its tough to transfer back few hundred k back to my bro or my dad. Thus need some advice here.

Main reason is that transferring back the prop involve too much tax to the government. Wondering is there any legal way to lower down the cost

that is how gov earn money lol.

Want cheap just ask your aunty to do a Will to give the property to u when she pass away.
Not sure if that involve any fees or not

Hi bossku,
Not enough points here. Do add on.

1. Property holding period?
2. Purchase price?
3. Free of encumbrances?
4. Purpose? So brother can own the property for own stay? So brother can own and sell in near future? So brother can sell the property and get the cash to invest in other places? OR???

Piece of advice first before commenting anything, don’t be cent wise ringgit foolish. Cheers.

Hello my dear bos, below is the info:

1. property is more than 2 years already
2. yes its free of encumbrances. no more loan obligation etc
3. Both aunt and dad is old already. Aunt mentioned she drafted in the will to pass on the property to my bro but we never seen the will before.

Actually main purpose is to get the house back to own family, but the main concern now is the absolute cost of getting it back. The cash to invest in other place can be ignored if not doable in legal way.

Any advice sifu?

Hello adik whether how you do it stamp duty Kena bayar juga. X mahal pun

Ok boss. Like this baru can give suggestion mah.

Method 2 obviously cannot pakai one. Too many unforseen circumstances. Lazy to explain also.

If your main concern is to get the prop under own family NOW without having to worry about future unforseen events, then i would suggest using Method 1. Cost of RPGT and stamp duty is small cost compare if your aunty dont get the prop transfer to your family in the future.

If die die want to save cost, and not urgency to transfer the prop back then I would suggest using below:

1) Request your aunty to give a PA to your father/brother/you. PA to be prepare by lawyer and registered.

2) Request your aunty to surrender the land title to PA holder or your lawyer.

3) Hold the property as long as you want until e.g. say 5 years, then only use the PA to transfer the property back to your family or buyer (if want to sell to liquid cash). Save taxes on RPGT. But stamp duty will be expensive a bit since value of property increase. But compare to tax saving of 25% RPGT with stamp duty, it would be logical to do so. Minimal cost.
*assuming you will not be using your aunty RPGT exemption for once in a lifetime, which will be unfair to her. (My thought only)

4) A full PA has the power to receive money on behalf of owner, sell, charge, pay taxes etc. As if the PA holder is the owner itself.

Note: Optional
*extra precaution for step 2.
To secure land title and deter any fraud in future, use the PA to “charge” the land to your brother or any other family member for a sum e.g. say 50k or 100k. Then enter a caveat against the land title.

All the above, is assuming that if u transfer the property now, u have to pay more than say 50k RPGT, then the above would be logical choice to save cost and sell later. If the RPGT is only less than say 10k, better use Method 1 without the need to do what Ive suggest earlier.

The above is only my suggestion and what I would do if I were in your shoes. 50k for me is justifiable to use the above method and 10k is not.

Anyhow, do consult your lawyer for more technical advice.

Thanks sifu Edyek, you provided a brand new solution to me

Anyway, I think will probably proceed with Method 1 because Method 2 doesn't make too much of sense to me.

I've check with the bank on the market value of the prop, its around 600k now.

Assuming method 1 is executed, cost is as below:

stamp duty:
first 100k 1% - 1k
next 400k 2% - 8k
last 100k 3% - 3k
Total duty: 12k

lawyer fee estimate 1% - 6k

I'm confuse about the RPGT part though, how it's calculated, coz now its just transfer of title and no sales involved.

Assuming conventional way it would be:

600k MV - 100k Purchase cost = 500k gain, 5% gain tax is 25k, which i think is a massive cost.

If its just the stamp duty + lawyer fees then its very much bearable.

What says you?

600k MV (LHDN will deem MV as Disposal price, even though no SPA).
Your dad purchase the property only 100k (Acquisition price) 2 years ago?

500k gain x 30% (less than 3 years disposal) = 150k RPGT leh.

Oh no la the house purchased close to 20 yrs already.

I see. Typo. You mentioned 2 years ago.

The furthest valuation date will only be Year 2000. If your property is bought 1988 say 100k, and if year 2000 is 120k, then 120k is your acquisition price. Save some minor amount in RPGT.

It is very much up to you. Like I mentioned earlier on, if you don't want any unforeseen circumstances in future and able to afford all the cost, by all means go ahead. Otherwise, you can consider my suggestion in my earlier post, but do consider the cost for legal fees for PA and other necessary documents.

My bad on the typo. Thanks sifu edyek. I will probably ask my bro proceed with the conventional way knowing that the RPGT part is not the huge amount as we have expected. Gamxia

RPGT counts even it is done through MOT which is no SPA involved?

If there is no "money" involved in the transaction, I will suggest you not to choose Method B, i.e. by way of SPA. (the legal fees, & RPGT will be a lot more compare to Method A)

Stamp duty will be based on the market rate (assessed by LHDN) or SPA price, whichever is higher. Thus, the stamp duty will be same, no matter u transfer by Love and Affection or SPA (as you put a rate lower than market rate).

Method A - no RPGT incurred, because your aunty does not gain any profit from the transaction. But if you plan to sell it within 5 years, then you will need to pay RPGT; after 5 years, the percentage is a lot lower.

Method A legal fees will be based on the market rate accessed by the LHDN.

You can do PA as well, but then, bear in mind that, with the PA, the property is not transferred to your brother yet, is just a power to let your brother control/manage the property. In the future, he still need to pay legal fees for transfer the property also.

** If you need to pay some money to your aunt for the property, your brother can refinance after the property transferred to him (Method A); or obtain loan with the PA.

All disposal is subject to pay RPGT. If the disposal is by way of LOVE AND AFFECTION (balasan kasih sayang), then the disposal price is deemed to be the MARKET VALUE of the property there and then (although the transfer is no gain no loss). However, our kind government gives only exemption for L&A IF the transfer is between :

• Husband & Wife,
• Parents & Children,
• Grandparents & Grandchildren

Other parties using L&A transfer is STILL subject to RPGT, which LHDN value the property based on the MARKET VALUE for PELUPUS (although no gain).

That is why during disposal time, all parties fill in CKHT form which one need to provide supporting documents to prove that one is eligible for RPGT exemption (like parents & children).

Edit:-
Of course last year and before years, if the duration is >5 years, any transfer (With SPA, without SPA, Love and affection etc) does not have to pay RPGT.

But now it is different. >5 years individual need to pay 5% RPGT, hence those who are not exempted from RPGT exemption, are subject to pay RPGT.


You sure relative transfer does not have RPGT? You done any sort of related transfer before?

This post has been edited by edyek: Jul 8 2019, 08:43 AM