20 FAQs About Property Transfer Between Family Members as a Gift in Malaysia
Property transfer as a gift in Malaysia is a common way for parents, spouses and other family members to transfer property without a purchase price. is a common way for parents, spouses and other family members to transfer property without a purchase price.
Unlike an ordinary sale and purchase transaction, there will be no monetary consideration aka purchase price involved. The property is instead transferred as a gift, commonly referred to as a transfer by way of love and affection.
However, the fact that no money changes hands does not mean that the property can simply be handed over informally. A proper transfer of ownership still involves legal documentation, stamp duty considerations, Real Property Gains Tax (“RPGT”) considerations and registration of the transfer.
Below are some of the common questions we receive regarding property transfers between family members as a gift in Malaysia.
1. Property Transfer as a Gift in Malaysia: Can I Transfer My Property to a Family Member?
Yes. A registered owner may transfer his or her property to another person without receiving a purchase price, subject to the terms and conditions of the title and any applicable legal requirements.
Under the National Land Code, Form 14A is used for the transfer of land, an undivided share in land or a lease.
2. What is a Property Transfer Between Family Members as a Gift?
A transfer by way of gift or commonly known as by way of love and affection (kasih sayang) generally refers to a transfer of property without monetary consideration, usually between family members.
Common examples include:
- parent to child;
- child to parent;
- husband to wife;
- wife to husband; and
- grandparent to grandchild.
However, an important distinction must be made, not every transfer between family members is entitled to the same stamp duty or RPGT treatment.
The relationship between the transferor and transferee must therefore be considered before determining the applicable exemption or tax treatment.
3. Can a parent transfer a house to his or her child?
Yes. A parent may transfer a property to a son or daughter as a gift during the parent’s lifetime.
For example:
A father owns a house registered solely in his name. He wishes to give the house to his daughter without requiring her to pay any purchase price.
Subject to the title, existing financing and other applicable requirements, the property may be transferred from the father to the daughter by way of love and affection.
Once the transfer has been completed and registered, however, the legal ownership of the property will have changed.
This consequence should be carefully considered before the transfer is carried out.
4. Is transferring a property to my child the same as leaving it to my child in my Will?
No. These are two very different arrangements.
If you transfer the property to your child during your lifetime, the ownership of the property is transferred once the transaction is completed and registered.
If you merely state in your Will that the property is to be given to your child, you remain the registered owner during your lifetime. The property will subsequently form part of your estate and be dealt with following your death in accordance with the applicable estate administration process.
Therefore, a parent should carefully consider whether he or she actually intends to give up ownership now, or merely intends for the child to inherit the property in the future.
5. Can I transfer a property to my spouse as a gift?
Yes. Property may also be transferred between spouses.
Currently, the stamp duty for the property transfers between husband and wife is exempted.
6. Can grandparents transfer property to their grandchildren?
Yes.
A grandparent may transfer property to a grandchild by way of gift, subject to the relevant legal requirements.
Transfers between grandparents and grandchildren are also one of the specified family relationships recognised under the current RPGT gift provisions.
7. Can I transfer my property to my brother or sister as a gift?
A property may generally be transferred to a sibling, subject to the applicable land and title requirements.
However, the ad-valorem stamp duty will be imposed on the property transfer and it will be calculated based on the market value.
8. Is stamp duty payable when property is transferred as a gift?
This is one of the most common misconceptions about a family property transfer.
The fact that the recipient does not pay a purchase price does not automatically mean that there is no stamp duty.
HASiL explains that ad valorem stamp duty applies to instruments transferring real property, whether the transfer is made by sale or gift, subject to any applicable exemption or remission.
Certain transfers between specified family members may qualify for exemptions or remissions under applicable orders.
The precise amount payable will depend on matters including:
- the market value of the property;
- the relationship between the parties;
- the citizenship of the relevant parties where required; and
- the exemption or remission applicable at the time the instrument is executed.
Accordingly, stamp duty should be checked based on the circumstances of the particular transfer rather than assuming that a family gift is automatically duty-free.
9. Do I need to appoint a valuer for a property transfer by way of gift?
Generally, no — not necessarily.
For a transfer by way of love and affection / without consideration, JKPTG’s current guidance says that after Form 14A is executed, the parties deal with LHDN/JPPH for the valuation of the property for the purpose of determining the stamp duty payable.
However, there may be circumstances where a private valuation report is useful or separately required for another purpose.
10. Do I need to sign a Sale and Purchase Agreement if I am giving the property to my child?
No. A genuine gift does not involve a sale and purchase agreement because there is no purchase price. The transfer of the registered property is generally effected through the appropriate transfer documentation, including Form 14A under the National Land Code. Depending on the circumstances, a Deed of Gift or other supporting documentation may also be prepared to record the intention and terms of the gift.
11. Do I need a lawyer to transfer property between family members?
Yes, it is strongly advisable to appoint a conveyancing lawyer to handle a property transfer between family members.
Although certain straightforward transfers by way of love and affection may technically be carried out without a lawyer, a property transfer is still a formal legal transaction involving the transfer of registered ownership. JKPTG confirms that a transfer by way of love and affection may involve the execution of Form 14A, valuation and stamp duty matters, and subsequent registration at the relevant Land Office or Land Registry.
A conveyancing lawyer can assist in checking the title and ownership, preparing the necessary transfer documentation, dealing with any restriction in interest or consent requirements, attending to stamp duty and tax-related matters, and ensuring that the transfer is properly presented for registration.
12. Can I transfer a property that still has a housing loan?
Generally, it is not straightforward to transfer a property that is still subject to a housing loan.
If the property is charged to a bank, the Vendor should first obtain the Bank’s consent before proceeding with the transfer. The existing loan and charge must be dealt with as part of the transfer process.
In practice, banks will generally not agree to simply allow the existing borrower to transfer the property to a family member while leaving the existing housing loan and security arrangements unchanged. The bank will usually require the existing financing to be settled or otherwise dealt with before the transfer can be completed.
Therefore, if the property is still subject to a housing loan, the parties should consult the Bank before signing or proceeding with the transfer documentation.
13. Can I transfer only 50% of my property to my child?
Potentially, yes.
The National Land Code’s prescribed Form 14A provides for the transfer of an undivided share in land, in addition to the transfer of the whole land.
For example, a parent who is the sole registered owner may wish to transfer a half share to a child so that they subsequently become co-owners.
However, this should not be done without understanding the consequences of co-ownership.
Once the child becomes a registered co-owner, issues may later arise concerning the sale of the property, financing, occupation, rental income or disagreements between the co-owners.
Related reading: Jointly Owned Property in Malaysia: Rights, Sale and Co-Owner Disputes.
14. Can one co-owner transfer the whole property to his child?
Generally, an owner cannot transfer an ownership interest that does not belong to him.
If a property is jointly owned by A and B, A’s ability to deal with his interest should not be confused with the ability to transfer B’s interest.
The title and nature of the registered ownership should therefore be examined before any transfer documentation is prepared.
15. What documents are normally required for a family property transfer?
The documents required will depend on the particular property and transaction, but they may include:
- the title deed / geran of the Property or relevant title information;
- Form 14A;
- current quit rent (cukai tanah) documents;
- current assessment (cukai taksiran) documents;
- documents supporting the family relationship, such as birth certificate, marriage certificate;
- consent documentation, where applicable;
- bank/redemption documents, where the property is charged; and
- other documents required by the relevant Land Office or authority.
The exact requirements should be checked for the particular transaction and State in which the property is situated.
16. What is the process of transferring property to a family member?
Although the precise procedure varies depending on the property, a typical transfer may involve the following stages:
Step 1 — Conduct a title search
The title should first be checked to determine the registered ownership, tenure, restrictions in interest, existing charges and other relevant endorsements.
Step 2 — Determine the nature of the transfer
The parties should establish whether the transfer is genuinely a gift without consideration and determine the relationship between the transferor and transferee.
Step 3 — Check for restrictions and consent requirements
For example, the title may contain a restriction requiring State Authority consent before a transfer can be registered.
Step 4 — Deal with any existing bank financing
If the property is charged, the existing bank’s requirements must be addressed.
Step 5 — Prepare and execute the transfer documentation
Form 14A is the prescribed instrument used for the transfer of land, a share in land or a lease under the National Land Code.
Step 6 — Attend to valuation and stamp duty
The applicable stamp duty and any available exemption or remission must be determined. JKPTG’s current guidance specifically refers to dealings with LHDN/JPPH for valuation and determination of stamp duty in love-and-affection transfers.
Step 7 — Attend to RPGT compliance
The RPGT position and applicable filing requirements should also be addressed.
Step 8 — Register the transfer
After the necessary requirements have been fulfilled, the transfer is presented for registration at the relevant land registry or land office.
Once registration is completed, the registered ownership will reflect the transfer.
17. Once I transfer the property to my child, can I take it back later?
A property transfer should not be treated as a temporary administrative arrangement.
Once the transfer has been validly completed and registered, the recipient becomes the registered owner of the interest transferred.
For example, if a parent transfers the whole property to an adult child, the parent should not assume:
“It is still really my property because I paid for it.”
The legal ownership has changed.
The parent should therefore understand the consequences before, rather than after, signing the transfer documents.
18. What happens if my child later sells the property?
Once the child becomes the registered owner, a subsequent sale by the child will be a separate transaction.
The tax position on that subsequent disposal should be determined based on the applicable RPGT rules at that time, including the child’s acquisition position arising from the earlier gift.
This is another reason why the family should consider the long-term consequences before proceeding with the transfer.
19. Is it better to transfer the property now or leave it to my child under a Will?
There is no single answer that is suitable for every family.
A lifetime gift may be appropriate where the owner genuinely intends to transfer ownership immediately.
A Will may be more appropriate where the owner wishes to retain ownership and control over the property during his or her lifetime and only wishes the beneficiary to receive it after death.
Before deciding, consideration should be given to matters such as:
- who should control the property now;
- whether the owner still intends to live in or use the property;
- existing bank financing;
- the owner’s other beneficiaries;
- possible future sale of the property;
- stamp duty and tax implications;
- family circumstances; and
- estate planning objectives.
The decision should therefore be made based on the owner’s circumstances rather than simply choosing whichever option appears cheaper.
20. How much are the legal fees for transferring property between family members?
The legal fees for transferring a property between family members as a gift will depend on the nature and complexity of the transaction.
A transfer by way of love and affection or for no consideration is treated differently from an ordinary sale and purchase transaction under the Solicitors’ Remuneration Order 2023. The applicable remuneration is determined under the relevant provisions of the Sixth Schedule, taking into account the work involved in the transaction.
The total amount payable may also include stamp duty, registration fees, search fees, administrative expenses and other disbursements, depending on the circumstances of the transfer.
Accordingly, there is no single fixed fee that applies to every family property transfer. If you are considering transferring a property to a family member as a gift, we can review the title and circumstances of the proposed transfer and provide you with a free quotation for the legal fees and estimated disbursements.
Conclusion
A property transfer between family members as a gift in Malaysia may appear straightforward because there is no ordinary sale and purchase price.
In reality, several matters may need to be considered, including:
- the registered title;
- relationship between the parties;
- Form 14A;
- restrictions in interest;
- State Authority consent;
- existing bank financing;
- stamp duty;
- RPGT; and
- registration of the transfer.
Most importantly, the transferor should understand that transferring property as a gift is not merely a paper exercise. Once the transfer is completed and registered, legal ownership of the transferred interest changes.
If you are considering transferring a property to your spouse, child, parent or other family member, obtaining advice before signing the transfer documents can help ensure that the intended transfer is structured and completed properly.
