Property
- For every RM100 or fractional part of RM100 of the contract price or the market value of the property, whichever shall be greater:-
RM1 on the first RM100,000.00; - RM2 on any amount in excess of the RM100,000 but not exceeding RM500,000; and
- RM3 on any amount in excess of RM500,000.
For example, the stamp duty for a property worth RM600,000 is calculated as follows:
| First RM100,000 | RM1 x RM100,000 ÷ RM100 = RM1,000 |
|---|---|
| Next RM400,000 | RM2 x RM400,000 ÷ RM100 = RM8,000 |
| Balance RM100,000 | RM3 x RM100,000 ÷ RM100 = RM3,000 |
| Total Stamp Duty Payable | RM12,000 |
The ad valorem duty for the principal instrument of a loan is calculated at RM5 for each RM1,000 or part thereof. For example, if the loan is RM500,000, the stamp duty payable is calculated as follows:-
RM5 x RM500,000 ÷ RM1,000 = RM2,500
| Consideration or Adjudicated Value | Scale of Fees |
|---|---|
| For the first RM500,000 | 1.0% (subject to a minimum fee of RM500) |
| For the next RM500,000 | 0.8% |
| For the next RM2,000,000 | 0.7% |
| For the next RM2,000,000 | 0.6% |
| For the next RM2,500,000 | 0.5% |
| Exceed RM7,500,000 | Negotiable (but shall not exceed 0.5% of such excess) |
Real Property Gains Tax (RPGT) is charged on gains arising from the disposal of real property regardless of residential, commercial, industrial or agricultural land. RPGT is also charged on the disposal of shares in a real property company (RPC).
With effect from 1 January 2014, the revised RPGT rates for the disposal of real property and shares in RPC are as follows:
| Date of Disposal | Companies | Individual (Citizen & PR) | Individual (Non-Citizen) |
|---|---|---|---|
| Within 3 years from the date of acquisition | 30% | 30% | 30% |
| In the 4th year | 20% | 20% | 30% |
| In the 5th year | 15% | 15% | 30% |
| In the 6th year onwards | 5% | 0% | 5% |
Yes, foreigners can most certainly purchase property in Malaysia but since land matters are state matters, the purchase is subject to the state approval and state ruling in particular on the minimum purchase price which differ from state to state and currently range from RM300,000 to RM2,000,000. The minimum purchase price for foreigners to purchase property in the State of Johor is currently set at RM1,000,000.
No. GST is exempted for purchase of residential property.
Will & Inheritance
A will is a document which contains a person’s intentions and wishes on the distribution of his or her assets on death.
Section 2 of the Wills Act 1959 defines a Will in technical terms as “a declaration intended to have legal effect of the intentions of a testator with respect to his property or other matters which he desires to be carried into effect after his death and includes a testament, a codicil and an appointment by will or by writing in the nature of a will in exercise of a power and also a disposition by will or testament of the guardianship, custody and tuition of any child.”
Drafting of a Will is encouraged if you have real property registered under your name and you have the well-being of your beneficiaries to take care of after your death (for e.g. minor children, spouse and old age parents).
Among other advantages, few main advantages of having a will are as follows:-
- give your assets to your designated loved ones (beneficiaries);
- appoint someone you trust to administer and manage your estate (trustee and executor);
- appoint someone you trust to be the guardian of your minor children;
- avoid family disputes over assets;
- avoid a lengthy inheritance process;
- substantially reduce the time and money to be spent in administering your estate;
- express your wishes for your funeral arrangements.
If you die without a will, your assets will be distributed to your beneficiaries in accordance to the formula sets out in the Distribution Act 1958 as per the following tables unless you are a Muslim in West Malaysia and Sarawak or is a native of Sarawak and if you are in the State of Sabah, then the Intestate Ordinance 1960 will apply:-
| Intestate dies leaving surviving: | Distribution of Estate |
|---|---|
| Spouse and Parents | Spouse ½ Parents ½ |
| Spouse and Issue | Spouse ⅓ Issue ⅔ |
| Parents and Issue | Parents ⅓ Issue ⅔ |
| Spouse, Issue and Parents | Spouse ¼ Parents ¼ Issue ½ |
| No Spouse, Issue or Parents | The following person(s), related to the intestate and alive at the death of the intestate, in the following order:
|
To make a valid will, you must:
- be at least 18 years old;
- be of sound mind;
- have your will in writing;
- have signed your will;
- have your signing witnessed by at least 2 witnesses who will then sign in your presence and in the presence of each other.
Employment and Labour
Employment law in Malaysia is generally governed by the Employment Act 1955 (“Employment Act”). The Employment Act sets out certain minimum benefits that are afforded to applicable employees. For employees covered under the Employment Act, it is the law that any terms and conditions of the employment contract which is less favorable than the provisions under the Employment Act or any other regulations made thereunder shall be void and not enforceable.
Employment Act does not apply to all employees. The protection under the Employment Act only applies to the following categories of employees:
- Employees whose monthly salary does not exceed RM2,000;
- Employees who are engaged in manual labour, regardless of salary;
- Employees engaged in the operation or maintenance of mechanically propelled vehicle;
- Employees who supervise or oversees other employees engaged in manual labour;
- Employees engaged in any capacity on a vessel (subject to certain other conditions); or
- Domestic servants.
Certain parts of the Employment Act are not applicable to certain categories of employees. For example, multiple parts of the Employment Act do not apply to domestic servants such as termination benefits, hours of work and maternity protection.
For the employees who are not covered by the Employment Act, their employment terms will be governed by the terms of their contract of employment, subject to any other applicable statutory requirements (eg: minimum retirement age, SOCSO and EPF etc). In other words, employers are mostly free to set any benefits for these employees. Most employers still use the Employment Act benefits as a guideline or “bare minimum”.
Under the Employment Act, these are the minimum requirements for annual leave:
| Length of service | Annual leave entitlement |
|---|---|
| Less than 2 years | 8 days |
| 2 years or more, but less than 5 years | 12 days |
| More than 5 years | 16 days |
For the incomplete 12 months of service, the employee’s entitlement to paid annual leave shall be in direct proportion to the number of completed months of service.
Under the Employment Act, sick leave entitlements are:
| Length of service | Sick Leave Entitlement (per annum); where hospitalization is not necessary |
|---|---|
| Less than 2 years | 14 days |
| 2 years or more, but less than 5 years | 18 days |
| More than 5 years | 22 days |
Where hospitalization is required, employees are entitled to 60 days of hospitalization leave in total per year, as may be certified by such registered medical practitioner or medical officer provided that the number of sick leave and hospitalization leave per year shall not exceed 60 days in total.
For employees paid on a monthly basis, overtime entitlements under the Employment Act are as follows:
| Working in excess of normal working hours on a normal work day | 1.5x hourly rate of pay |
| Rest day, but working normal working hours | Where work does not exceed half his normal hours of work: ½ the ordinary rate of pay for work done on that day Where work is more than half but does not exceed normal hours of work: 1 full day’s wages at the ordinary rate of pay |
| Rest day, but working in excess of normal working hours | 2x hourly rate of pay |
| Public Holiday, but working normal workings hours | 2 days wages at ordinary rate of pay |
| Public holiday in excess of normal working hours | 3x hourly rate of pay |
The hourly rate of pay means the ordinary rate of pay divided by the normal hours of work. The ordinary rate of pay shall be calculated according to the formula of Monthly Salary / 26 days.
Overtime payments for employees not governed under the Employment Act shall be based on their respective employment contracts.
All female employees (including employees not governed under the Employment Act) are entitled to 60 consecutive days of paid maternity leave, unless she already has 5 or more surviving children at the time of her confinement. An employer is required to pay maternity allowance (i.e. payment of her salary for that 60 consecutive days) to an employee if she has been employed by that employer for:
- At least 90 days in aggregate during the 9 months before her confinement; AND
- She was employed by the employer at any time in the four months immediately before her confinement.
This means that an employer could still be required to pay maternity allowance to an employee who has left employment before giving birth. However, the law requires that a female employee who is about to leave her employment and knows she is expected to deliver within 4 months from her last date of employment must notify her employer of her pregnancy, failing which she will not be allowed to receive any maternity allowance.
A female employee cannot be terminated during maternity leave or for a period of 90 days after her maternity leave (if she is unable to resume work due to an illness arising out of her pregnancy and confinement, as certified by a registered medical practitioner).
There is so far no statutory requirements for employers in Malaysia to provide paternity leave to new fathers.