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WorksheetsQUIZZ ROAD TO FINAL 2_REM251
Total questions: 30
Worksheet time: 54mins
Puan Rose Melissa decided to dispose her 24 hectares rubber plantation.She signed an agreement on 3rd August 2020 to sell 13 hectares of the land to Dato' Khalid for RM610,000.
On the same date she transferred the remaining 11 hectares to her only son Riz Macwillson.
However, due to some administrative problems, the documentation for the area transferred to Dato' Khalid was only completed on 5th May 2021. Market Value indicated a 5% increase from the year 2019 to 2021. Riz Macwillson paid RM10,500 stamp duty for the transfer.
Determine the STAMP DUTY chargeable against Dato' Khalid.
RM 15, 500
RM 14, 500
RM 13, 500
RM 16, 500
RM 17, 500
RPGT EXEMPTION FOR PRIVATE RESIDENCES (SCHEDULE 3)
Which of the following is TRUE ?
This exemption can be obtained only once in a life time in respect of only one residential property
Section 8 - exempts an individual who is a citizen or a permanent resident liability to RPGT in respect of gain on disposal of a private residence
A private residence is a building or part of a building in Malaysia owned by an individual and certified fit for business purposes.
Occupied – an individual need not occupy, provided CF has been issued. It may be rented out or left vacant
Under the provisions of Section 8 concerning the Third Schedule, exemptions may be granted to individuals who remove the first three official residents.
RPGT EXEMPTION FOR INDIVIDUALS (SCHEDULE 4)
Which of the following is TRUE?
Permitted allowance for an amount of RM10,000 OR 10% of the chargeable gain, whichever is greater.
No allowance is allowed except for RM10,000 OR 5% of the profit charged, whichever is greater.
Revenue through RPGT was frozen several times before 2021
How To Calculate Stamp Duty Fees...The BEST answer to explain STAMP DUTY.
Stamp duty also applies for loan agreements, but it is capped at a maximum rate of 0.5% of the full value of the loan.
...the purchase of a property worth RM500,000 would put you in the first two tiers, hence, 1% of RM100,000 and 2% of RM400,000.
the calculation formula for Legal Fee & Stamp Duty is fixed as they are governed by law. For the next RM500,000 is 0.8%
Which of the following are true?
What Is A Sale and Purchase Agreement?
a legally binding agreement between a seller and a buyer
is a mutual agreement between the seller and a buyer, hence, it cannot be further negotiated or amended and cancelling it will result in a 10% penalty of the purchase price.
outlining the details of the transaction such as terms and conditions, price of the property, and all the important details the seller should know about.
What Is Stamp Duty?
need to pay a penalty of 5%-20% of the deficient duty.
also known as a transactional tax
for stamping transactional documents such as loan agreements, tenancy agreements, and documents pertaining to property transfer, including the SPA.
for stamping transactional documents such as loan agreements, tenancy agreements, and documents pertaining to property transfer, not including the SPA.
a legal requirement and must be stamped within 30 days of the signing of the SPA
What Are Legal Fees?
Legal fees are part of the SPA and are basically a charge for engaging legal assistance for the purchase of a property.
Developers may also choose to absorb the legal fees to reduce the buyer’s financial worries.
The legal fees are calculated based on a percentage of the buying price of the property, which can be anywhere from 0.25%-1%, depending on the value of the property.
The legal fees are calculated based on a percentage of the buying price of the property, which can be anywhere from 10%-15%, depending on the value of the property.
For a property bought at RM600,000, the legal fees would be:
Total legal fees = RM5,800
Total legal fees = RM6,800
Total legal fees = RM5,600
Total legal fees = RM7,800
Total legal fees = RM6,700
YES
NO
Real Property Gains Tax (RPGT) is a form of Capital Gains Tax that homeowners and businesses have to pay when _________________ of their property in Malaysia.
disposing
renting
developing
If you sell your house with a loss you don’t have to pay any RPGT because you didn’t make any profit. If you made a profit you need to make sure you pay the RPGT within ____________ of the sale.
30 days
90 days
60 days
120 days
50 days
History about the RPGT;
It was suspended temporarily from April 2007 to December 2009 and reintroduced in 2010.
It was suspended temporarily from April 2007 to December 2009 and reintroduced in 2012.
In 2019, the RPGT rates have been revised. Then, there's another revision to the RPGT for under Budget 2020, as well as the Exemption Order for 2020.
In 2018, the RPGT rates have been revised. Then, there's another revision to the RPGT for under Budget 2020, as well as the Exemption Order for 2020.
Who Pays RPGT?
Malaysian citizens and/or permanent residents who sell their property within the first five years of acquiring it will be subject to RPGT.
Foreigners will be charged a rate of 10% RPGT when they sell their property, five years or more after purchasing it.
RPGT is also imposed on the disposal of shares in companies when 75% of its tangible assets involves real estate.
RPGT is also imposed on the disposal of shares in companies when 85% of its tangible assets involves real estate.
Foreigners will be charged a rate of 20% RPGT when they sell their property, five years or more after purchasing it.
Which of the following are true?
What Is Allowable Loss?
Allowable loss can apply in circumstances where more than one property is sold by the same owner in the same tax for two years.
Allowable loss can apply in circumstances where more than two property is sold by the same owner in the same tax year.
Allowable loss can apply in circumstances where more than one property is sold by the same owner in the same tax year.
Allowable loss can apply in circumstances where more than three property is sold by the same owner in the same tax year.
If you sell a property at RM20,000 loss, but then sell another at RM100,000 gain, your total taxable amount is _____________
RM100,000
RM120,000
RM80,000
RM70,000
Allowable expenses basically means the money you’ve spent improving or maintaining a property to retain/increase its value;
Enhancement: Money you’ve spent on refurbishments
Enhancement: Money you’ve spent on extensions
Preservation: wood treatment to stop it from decaying
Pros And Cons Of RPGT Changes;
Raises more money for national spending from tax
May help reduce speculation (although property speculation is usually a short-term gain)
May engourage speculation (although property speculation is usually a short-term gain)
More tax! It means you have to pay 5% tax on profits of your sale
May slow down the housing market long-term
The concept of Annual value......
Estimated gross rent at which holding might reasonably be expected to let from year to year the landlord paying the expenses of repair, insurance maintenance, or upkeep and all public rates and taxes.
Estimated net rent at which holding might reasonably be expected to let from year to year the landlord paying the expenses of repair, insurance maintenance, or upkeep and all public rates and taxes’
Estimated gross rent at which holding might reasonably be expected to let from year to year the tenant paying the expenses of repair, insurance maintenance, or upkeep and all public rates and taxes
In determining the annual value, the followings should be taken into consideration:
any machinery used for making of any article or part of an article, altering, repairing, ornamenting, adapting for sale to enhanced value to the holding shall not be taken into consideration
in estimating the market value no account shall be taken of any restrictions or control on rent
in estimating the annual value no account shall be taken of any restrictions or control on rent
any machinery used for making of any article or part of an article, altering, repairing, ornamenting, adapting for sale to enhanced value to the holding shall be taken into consideration
In determining the annual value, the followings should be taken into consideration, in the case of land :
which is partially occupied or partially built upon; - AV or 10% of MV (discretion of Valuation officer)
which is vacant, unoccupied or not built upon; - 10% of MV
with an incomplete building; - 10% of MV
with a building which has been certified by the local authority to be abandoned or dilapidated or unfit for human habitation, - 10% of MV
with an complete building; - 10% of MV
Principals of Annual Value;
Each holding must be independently assessed.
Valued must be assumed to be vacant and to let.
Rebus Sic Stantibus
Every intrinsic to push or down to value must take into consideration
Value represent at which hypothetical tenant would pay
The Concept of Improved Value;
The price that owner willing and not obliged from a willing purchaser with whom he was bargaining for sale and purchase of the holding.
The state of Johor is the only state that continues to use the improved value as basis of rating.
In the other state, improved value was only used in the case of any holding which is vacant, unoccupied or only partially built upon.
The state of Malacca is the only state that continues to use the improved value as basis of rating.
The price that owner negotiate and not obliged from a willing purchaser with whom he was bargaining for sale and purchase of the holding.
A piece of rubber tree land with an area of 8.0 acres was sold at RM220,000 recently in Johor. The rate given by the Majlis Perbandaran Kulai is at 0.25% from market value. The amount of tax according to improve value basis is.......
RM600
RM500
RM550
RM700
RM750
Some holdings are exempted either fully or part of it, from rates at the discretion of the State Authority as provided under section 134 and they include:
Places of worship
Licensed burial ground
Public schools
Date of completion means;
date of valuation
The date of ownership transferred by the disposer
The date on which the disposer received the whole in money for the transfer, whichever is the earlier
The local authority has to prepare a Valuation List of all rateable holding every 5 years containing:
Address of the holding
Designation to identify the building either by name or number sufficient
The annual value of the holding
Names of owner and occupier
Improve the value of the holding
Is RPGT a waiver?
THE waiver of the real property gains tax (RPGT) has resulted in more secondary market transactions and new demand for sub-sale property, industry data showed.
RPGT exemption sees more secondary market transactions
The gains tax exemption also benefits investors. While it may not directly put money in the pocket of investors purchasing today, it reassures them about investing in the property market and the possibility of making gains.
If the seller is saving 5% on tax, the buyer has more room to negotiate. Malaysians with an average priced home will save more than RM20,000 in gains tax due to the exemption.
Buyers today can obtain loans with interest rates of 2.85% to 4.5%, which saves them tens of thousands of ringgit over the loan’s lifetime.
Stamp Duty Exemption on Purchase and Financing of First Residential
Stamp duty exemption period-Sale and purchase agreement executed from 1 January 2021 to 31 December 2025
Stamp duty exemption period-Sale and purchase agreement executed from 1 January 2021 to 31 December 2030
Stamp duty exemption period-Sale and purchase agreement executed from 1 January 2021 to 31 December 2022
Stamp duty exemption period-Sale and purchase agreement executed from 1 January 2021 to 31 December 2027
Stamp duty exemption period-Sale and purchase agreement executed from 1 January 2021 to 31 December 2023
