Parents often want to put the family home in a child's name, or a husband wants to add his wife to the title. Done as a normal sale, that can cost tens of thousands in stamp duty. Done as a "love and affection" transfer, it can cost a small fraction of that.
The savings are real, but they only apply to certain relationships, and there are a few traps that catch people out. Here's how it works.
What a love and affection transfer is
It's a transfer of property with no money changing hands, made because the two people are close family. The Contracts Act 1950 allows an agreement without payment if it's in writing, registered, and made "on account of natural love and affection" between people in a near relationship.
There's no sale and purchase agreement. The transfer is done with a memorandum of transfer (Form 14A) that states love and affection as the reason. If the property doesn't have its own individual or strata title yet, a deed of assignment is used instead.
Stamp duty: who saves what
Stamp duty is worked out on the property's market value, not on a price, because there isn't one. LHDN can ask the Valuation and Property Services Department (JPPH) to confirm that value. These are the reliefs:
| Transfer between | Stamp duty |
|---|---|
| Husband and wife | Fully exempt |
| Parent and child | No duty on the first RM1 million of market value, half the duty on anything above that |
| Grandparent to grandchild | No duty on the first RM1 million of market value, half the duty on anything above that |
| Brothers and sisters, uncles, aunts, cousins, in-laws, friends | Full duty, as in a normal sale |
The parent, child and grandchild relief has applied to transfers signed since 1 April 2023, and the person receiving the property must be a Malaysian citizen. "Child" includes stepchildren and legally adopted children.
Worked examples
A RM800,000 home
- Father to son: RM0 stamp duty. The whole value is under RM1 million.
- Brother to sister: RM18,000, the same as a normal sale (RM1,000 + RM8,000 + RM9,000).
A RM1.2 million home, mother to daughter
- Normal stamp duty would be RM32,000.
- The first RM1 million is exempt.
- The remaining RM200,000 would normally be charged at 4%, which is RM8,000, and that's halved to RM4,000.
For comparison, between husband and wife the same RM1.2 million home would cost nothing in stamp duty.
RPGT
Transfers between husband and wife, parent and child, and grandparent and grandchild are treated as "no gain, no loss." The person giving the property pays no RPGT on the transfer.
The catch comes later. When the person who received it eventually sells, the gain is generally measured from what the giver originally paid, not from the market value on the day of the gift. So if your parents bought a house for RM200,000 in 1998 and you sell it for RM900,000, RPGT looks at the full RM700,000 jump. Depending on how long you've held it, the rate could be 0%, but it's worth checking before you sell.
Transfers to other relatives, such as a brother or sister, don't get this treatment. The giver is treated as having sold at market value, so RPGT can apply if they've owned it for less than six years.
The other costs
- Legal fees: there's no sale price, so lawyers generally work from the market value. Some quote a fixed fee for a simple family transfer. Get the quote in writing, with SST and disbursements included.
- Valuation: you may need a valuation report to support the market value used for stamping.
- Land office fees: registering the transfer, plus searches.
- State consent: leasehold land, and some other titles, need the state's consent before a transfer, which adds time and a fee.
How it's done
-
First
Check the title and any loan
Your lawyer runs a land search to see who owns it, whether the bank has a charge over it, and whether consent is needed.
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If there's a loan
Deal with the bank
The bank has to agree. Often the person receiving the property takes out a new loan to settle the old one. If no bank will refinance it, the transfer may have to be done as a normal sale, which means full stamp duty.
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Then
Sign the transfer
Both of you sign the memorandum of transfer (or deed of assignment), stating love and affection as the reason. For a love and affection transfer, the form can be witnessed by the land office at no charge.
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Within 30 days
Stamp it
The lawyer submits it for stamping with proof of the relationship, such as birth or marriage certificates, and claims the exemption.
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Finally
Register it
Once stamped, the transfer is registered at the land office and the title shows the new owner.
Things that trip people up
- Using an SPA. If the paperwork is drawn up as a sale with an SPA, it's treated like any other sale and the exemption is lost.
- Losing your first-home relief. The first-home stamp duty exemption is only for people who have never owned a home, including one received as a gift. If your child plans to buy their own first home soon, receiving yours first could cost them that exemption. Worth thinking about the order.
- Siblings. A lot of families assume brothers and sisters are covered. They aren't.
- It can't easily be undone. Once the title is in someone else's name, it's theirs. Make sure everyone in the family understands that, and consider whether a will suits your situation better.
Sources
- Parent, child and grandchild relief, RM1 million threshold and 1 April 2023 start: EY tax alert on the Stamp Duty (Exemption) (No. 3) Order 2023.
- Revocation of the older 50% remission: EY tax alert, June 2023.
- Husband and wife exemption: PwC Malaysian Tax Booklet 2026/2027.
- The process, deed of assignment and Contracts Act basis: Halim Hong & Quek and iProperty.
This guide is general information, not legal or tax advice. Family transfers have long-term consequences, so speak to a lawyer before signing anything. See our full disclaimer.