Transfer of Property (with Title) by Way of Love and Affection within Kuala Lumpur

Our public service article today is about Transfer of Property (with Title) by Way of Love and Affection within Kuala Lumpur

(1) Land Search of the Property

• You will need the details of the property such as the Lot number, the title type, the title number and the Mukim where the property is situated. 
• If you don’t know where to find this, it is also on the Quit Rent bill you get every year. 
• Then go to the appropriate Land Office, fill up the forms, pay the fee to conduct a land search. 

An initial land search is helpful and necessary because: -

• you will know what is the current status of the land and whether there are any restrictions on the title, i.e. for example whether it has been caveated or whether any other encumbrances are present that will affect any dealings to the land that you may have planned. 
• Note that the land search will also indicate whether a certain land/property will need state consent before any dealings can take place. The transferor would then require to seek consent and pay the fees to the state land authority.
•  if the property has been within your family for a very long time, there is a good chance that the title that you are currently holding is an old one. 

The Land Office may then require you to apply for the extraction of a new title (Tukar Ganti Hakmilik) before any dealings on the property can take place. This procedure is free of charge at the PTGWPKL (Pejabat Tanah dan Galian Wilayah Persekutuan Kuala Lumpur) [www.ptgwp.gov.my]. The Tukar Ganti Hakmilik application would require you to fill in the current information of the property which you can obtain from the Land Search that you had done earlier. What you will need for the application:

• Details of the property
• Original Title of the property
• Recent bill and receipt/proof of payment of Quit Rent

(2) Preparation of Documents

• Forms from LHDN/Stamp Office: CKHT 1A, CKHT 2 and CKHT 3 (if applicable)
• Form from Land Office: Memorandum of Transfer (Borang 14A)

These can be prepared and executed simultaneously. What you will need for the transfer:

i) Original Title of the property (or the new Original Title you extracted)

ii) Copies of Identity Cards of parties (In full colour).

iii) Latest Bill and Receipt/Proof of Payment of Quit Rent

iv) Latest Bill and Receipt/Proof of Payment of Assessment

v) Copies of Birth Certificate and/or proof of relationship

vi) Duly prepared and executed CKHT 1A, CKHT 2A, CKHT 3 (if applicable), Borang 14A

(3) Submission of Documents to LHDN/Stamp Office

LHDN
Stamp Duty (is usually borne by Transferee/Purchasers) - It is the tax calculated on the market value of the property at the time of acquisition. Although there is 100% exemption of stamp duty for transfers between spouses and a 50% exemption for parent to child/child to parent dealings and grandparent-grandchild/grandchild-grandparent dealings, LHDN/Stamp Office will still require the forms below to be completed for their adjudication.

RPGT (usually borne by Transferor/Sellers) – Real Property Gains Tax is tax charged on gains arising from the disposal/selling of real properties. For the purposes of a transfer by way of love and affection/gift of family members stated above, there is no RPGT payable.

• The CKHT1A for the person disposing the property (Transferor).
• The CKHT 2A for the person receiving the property (Transferee).
• The CKHT 3 for a once in a lifetime exemption of RPGT for transfer of residential properties. This only applies if it is a transfer by way of love and affection/gift to others not within the family relationships stated above. 

Stamp Duty
Due to the crippling effects of Covid-19, pursuant to the National Economic Recovery Plan on 5
June 2020, the following Exemption Orders were gazetted on 28 July 2020 and are effective from 1 June 2020. These Exemption Orders may not directly affect transfers by love and affection/gifts but we shall put it here for some useful bed-time reading.

NOTE:

Stamp Duty (Exemption) (No. 3) Order 2020

Stamp Duty (Exemption) (No. 4) Order 2020

Real Property Gains Tax (Exemption) Order 2020


What is needed for Submission to LHDN/Stamp Office which is done online:

i) PDFs of Title of the property (or the new Original Title you extracted)

ii) PDFs (in colour) of Identity Cards of parties

iii) PDFs of Birth Certificates and/or proof of relationship

iv) PDFs of the duly prepared and executed CKHT 1A, CKHT 2A, CKHT 3 (if applicable), Borang 14A

4. Payment of Stamp Duty
Once the above documents are submitted online [https://stamps.hasil.gov.my/stamps/] to the Stamp Office, within a few days, you will get a Notis Taksiran on the adjudicated amount that you will need to pay the LHDN/Stamp Office. Payment must be made within 1 month and the mode of payment is advised in the letter. After successful payment has been effected, the LHDN/Stamp Office will issue a Sijil Setem as proof of payment of the Stamp Duty and a certification that all is good to go.


5. Presentation of Documents to Land Office
Presentation of documents to the Land Office is necessary for the name of the new owner be updated in the Title of the Property. Also, the Land Office will take the liberty to update the Jabatan Penilaian & Pengurusan Harta of the relevant Municipal Council of the state that there has been a change in ownership. It must also be stated here that every document must follow the specifications of the Land office right up to the type and colour of the pen used for signing. The presentation fees differ in each state, so does the penalty fees if it is filed out of time. Yes, we emphasise this here that the lawyers will have to present all documents within 3 months of the date of the Borang 14A. So the settlement of the Stamp Duty and all the relevant searches and preparation must be done without delay. What you will need/ your lawyers will need for successful presentation of documents to the Land Office:

i) Cover Letter of all documents to be submitted

ii) Original Title

iii) Copy of the Notis Taksiran issued by LHDN/Stamp Office

iv) Original Sijil Setem

v) Copies of Identification Cards of Parties (in colour).

vi) Latest Bill and Receipt/Proof of Payment of Quit Rent

vii) Latest Bill and Receipt/Proof of Payment of Assessment

viii) Copies of Birth Certificate and/or proof of relationship

ix) Presentation Fees

6. Collection of new Original Title
Once presentation is made, thus begins your waiting period for the email from Land Office to arrive. If there is any rejection of the presentation, there will be a letter stating the things that have to be corrected/amended/added/taken out. Conversely, if it is good news and there is an acceptance of the presentation, there will be an email for the collection of the updated Original Title. Remember to bring the original receipt and your identification card for the documents to be released to you. Definitely there is a need for a professional eye for detail here. The guidelines are very stringent and often different land offices may have differing internal guidelines causing documents to be rejected. It has not been standardized fully yet though there are improvements with mechanisms at the land office being put in place to streamline and modernize processes. The best way at the moment in the event you face any complications is to appoint counsel to assist you. Otherwise you may arrange to meet with the intrepid land officers to seek their step-by-step guidance to ensure a successful presentation of documents at the Land Office.


Conclusion
In the event you face any complications or roadblocks which arise if you are doing this for the first time, it may be best to look for lawyers in active private practice who practice land law and conveyancing from the Malaysian Bar Directory to get things started and to handle your transaction. Many of the online systems cater to lawyers and a legal firm registration with the governments online vendors is necessary to do much of the work smoothly. You can also alternatively see if you can do it yourself if you can work through the steps and the timelines. Perhaps consider finding a lawyer you can connect with and trust, and for property matters, bear in mind that fees are chargeable according to a fixed statutory scale, with some provision made for 25% reduction of legal fee on a case-by-case basis.

Good luck.
Best regards from all of us at Messrs Varghese and Co.