LOVE AND AFFECTION PROPERTY TRANSFERS IN MALAYSIA: STAMP DUTY, EXEMPTIONS AND WHAT TO EXPECT
Not all property transfers in Malaysia involve a buyer and a seller negotiating at arm’s length. A significant number occur within families: between spouses, between parent and child, or between grandparent and grandchild, whether as an act of estate planning, asset restructuring, or simply putting the family home in the right name. These are commonly referred to as love and affection transfers.
The stamp duty treatment for these transfers differs from a standard sale, and understanding the distinction matters before any instrument is prepared. This article covers what a love and affection transfer is, why the law treats it differently, and the exemptions available under the Stamp Act 1949.
What Is a Love and Affection Transfer?
A love and affection transfer is a transfer of real property made without monetary consideration between family members. The transferor gives the property out of natural love and affection rather than for a commercial price.
The most common scenarios in my practice are:
- A husband transferring his property into joint names with his wife, or solely into her name
- A parent transferring the family home to an adult child
Because no market-rate consideration changes hands, these transactions are not governed by a Sale and Purchase Agreement in the ordinary sense. They are typically effected by a Memorandum of Transfer executed by way of gift, supported by documents confirming the relationship between the parties and the nature of the transfer.
Why Does the Law Exempt Love and Affection Transfers from Full Stamp Duty?
To understand the exemption, it helps to understand what stamp duty is designed to tax. The ad valorem duty on a Memorandum of Transfer is, at its core, a tax on the instrument value in a property transaction. In a commercial sale, the buyer pays the seller for the market value of the property, and stamp duty is levied as a percentage of that consideration.
In a love and affection transfer, this premise does not hold. No economic value changes hands at arm’s length. The transaction is not a market event; it is a family arrangement reflecting the transferor’s intention to benefit another family member. Taxing it at commercial rates would mean treating a gift between family members in the same manner as a sale to a stranger, which is economically inaccurate.
The Malaysian government has, through successive Ministerial Orders under the Stamp Act 1949, formalised this recognition. The spousal exemption is governed by Perintah Duti Setem (Pengecualian) (No. 10) 2007 (P.U.(A) 420/2007), while transfers between other specified family members are governed by P.U.(A) 178/2023 (Stamp Duty (Exemption) (No. 3) Order 2023), in force from 1 April 2023. Together, these instruments reflect a settled and consistent policy position: that the state should not place a full transaction tax burden on the natural movement of property within a family unit.
Stamp Duty on Spousal Transfers
Transfers of real property between husband and wife by way of love and affection attract a full exemption from ad valorem stamp duty under Perintah Duti Setem (Pengecualian) (No. 10) 2007 (P.U.(A) 420/2007). In place of the tiered MOT duty that would otherwise apply, a nominal fixed duty of RM10 is payable on the instrument of transfer.
The exemption applies regardless of the value of the property and covers both residential and non-residential real property. A spousal transfer of a RM2,000,000 property and a RM300,000 property both attract the same RM10; the exemption is not capped or tiered.
Key conditions:
- The parties must be legally married at the time of the transfer
- The transfer must genuinely be by way of love and affection, with no monetary consideration
Where the property is subject to an existing bank charge, the bank’s consent to the transfer will typically be required. You should consult your bank beforehand as it depends on the bank’s policy and your spouse’s loan eligibility to repay.
Stamp Duty on Inter-Generational Family Transfers
Transfers of real property between the following family members by way of love and affection qualify for a stamp duty exemption under P.U.(A) 178/2023:
| Donor | Recipient |
|---|---|
| Parent (one or both) | Child |
| Child | Parent (one or both) |
| Grandparent (one or both) | Grandchild |
| Grandchild | Grandparent (one or both) |
For the purposes of this Order, “child” means a legitimate child, a step child, or a child adopted in accordance with any law.
How the exemption works:
The exemption under P.U.(A) 178/2023 is structured as follows:
- On the first RM1,000,000 of the property’s market value: stamp duty is fully exempt
- On any amount exceeding RM1,000,000: 50% of the applicable stamp duty is payable
This means that for properties valued at RM1,000,000 or below, no MOT stamp duty is payable at all. For higher-value properties, only half the duty on the excess is charged.
Worked Example 1: Property valued at RM750,000
Standard MOT stamp duty (without exemption):
| Band | Amount in Band | Rate | Duty |
|---|---|---|---|
| First RM100,000 | RM100,000 | 1% | RM1,000 |
| Any amount in excess of RM100,000 but not exceeding RM500,000 | RM400,000 | 2% | RM8,000 |
| Any amount in excess of RM500,000 but not exceeding RM1,000,000 | RM250,000 | 3% | RM7,500 |
| Total | RM16,500 |
Under P.U.(A) 178/2023 (property value below RM1,000,000): RM0 payable
Worked Example 2: Property valued at RM1,500,000
Standard MOT stamp duty (without exemption):
| Band | Amount in Band | Rate | Duty |
|---|---|---|---|
| First RM100,000 | RM100,000 | 1% | RM1,000 |
| Any amount in excess of RM100,000 but not exceeding RM500,000 | RM400,000 | 2% | RM8,000 |
| Any amount in excess of RM500,000 but not exceeding RM1,000,000 | RM500,000 | 3% | RM15,000 |
| Any amount in excess of RM1,000,000 | RM500,000 | 4% | RM20,000 |
| Total | RM44,000 |
Under P.U.(A) 178/2023:
- Duty on first RM1,000,000: fully exempt (RM24,000 waived)
- Duty on excess RM500,000 at 4%: RM20,000 × 50% = RM10,000 payable
Total MOT stamp duty payable: RM10,000 (saving of RM34,000)
Key conditions:
- The instrument of transfer must be executed on or after 1 April 2023
- The recipient must be a Malaysian citizen: this is a threshold condition and is not satisfied by permanent residents or foreign nationals
- The transfer must be by way of love and affection, without monetary consideration
- The value of the property is assessed at market value by LHDN
The Process: What to Expect
A love and affection transfer involves broadly the same steps as a standard conveyance, with some modifications:
-
Engagement of solicitor: the transferor (and ideally with the transferee) engages a solicitor to prepare the documentation. Both parties may be represented by the same firm in a family transfer, though independent advice is always available.
-
Preparation of documents: the solicitor prepares the Memorandum of Transfer and any supporting documents required by the Land Office.
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Adjudication and stamping: the MOT is submitted to LHDN for adjudication. LHDN will assess the market value of the property and apply the applicable exemption: P.U.(A) 420/2007 for spousal transfers, or P.U.(A) 178/2023 for inter-generational family transfers. The stamp duty is paid at this stage.
-
Registration: the stamped MOT is presented to the relevant Land Office for registration. Once registered, the transferee’s name appears on the title.
The timeline from engagement of solicitor to registration typically ranges from two to four months, depending on factors such as whether there is restriction in interests on the property, the Land Office backlog and whether a bank consent is involved.
Frequently Asked Questions
Can I transfer only a share in a property to my spouse, rather than the whole property?
Yes. A partial transfer, for example adding your spouse as a joint proprietor or transferring a half share, is possible. The stamp duty exemption applies proportionally to the share being transferred. Your solicitor will advise on the appropriate instrument.
What is the stamp duty if I transfer property to my sibling?
Siblings are not among the eligible relationships under either P.U.(A) 420/2007 or P.U.(A) 178/2023. A transfer between siblings by way of gift would be adjudicated at market value and attract the full ad valorem MOT stamp duty at the standard tiered rates. For the standard stamp duty rates, refer to my article on stamp duty on property in Malaysia.
My child is a step-child. Does the exemption under P.U.(A) 178/2023 still apply?
Yes. The Order expressly defines “child” to include a legitimate child, a step child, and a child adopted in accordance with any law. A step-child who is a Malaysian citizen qualifies for the exemption on the same basis as a natural child.
Can a foreign national receive property in Malaysia by way of love and affection transfer and claim the stamp duty exemption?
No. Under P.U.(A) 178/2023, one of the threshold conditions for the exemption to apply is that the recipient must be a Malaysian citizen. Where the recipient is not a Malaysian citizen, whether a foreign national or a permanent resident, the exemption does not apply and the full ad valorem stamp duty is chargeable on the instrument of transfer. A parent who wishes to transfer property to a child who is a foreign national will not be able to rely on this Order to reduce the stamp duty payable.
Do I need a Sale and Purchase Agreement for a love and affection transfer?
No. Because there is no monetary consideration, there is no sale and therefore no SPA. The transfer is effected by a Memorandum of Transfer accompanied by a statutory declaration and, where applicable, a Deed of Gift. Your solicitor will prepare the appropriate documentation.
Summary
| Transfer Type | MOT Stamp Duty | Governing Order |
|---|---|---|
| Spouse to spouse | RM10 (fixed nominal duty) | P.U.(A) 420/2007 |
| Parent, child, grandparent, grandchild (recipient must be Malaysian citizen) | Fully exempt on first RM1,000,000; 50% of duty on excess | P.U.(A) 178/2023 |
| Sibling or other family member | Full standard tiered rate | No exemption |
Love and affection transfers are a legitimate and commonly used mechanism for intra-family property structuring in Malaysia. The stamp duty savings under P.U.(A) 178/2023 can be substantial, particularly for properties valued below RM1,000,000 where the MOT stamp duty is entirely waived. The process involves legal fees, consent where applicable, and Land Office registration, but for many families the outcome is well worth pursuing.
If you are considering a family property transfer in Kuala Lumpur and would like advice on the appropriate structure and costs involved, you are welcome to get in touch.
This article reflects the general legal position as at June 2026. Stamp duty exemptions are subject to amendment by Ministerial Orders under the Stamp Act 1949. Nothing in this article constitutes legal advice in respect of any specific transaction. Please consult a qualified solicitor for advice on your particular circumstances.