Property Transfer for Love and Affection: What Happens to Your Housing Loan?

Recently, many of our clients and friends have been asking us about matters related to transferring ownership of Property. One case we came across involved a client who owns a Property and wants to add his wife’s name to the Title, or in other words, he wants the Property to be jointly owned by both husband and wife.

Now, many people may think: “Isn’t it just a matter of going to the land office to change the name?” But actually, it’s not that simple.

In Malaysia, if you want to add or remove a name from an existing Property Title, or transfer ownership either to an existing owner or to a third party, the whole process needs to be formally done and properly documented.

First, the client needs to appoint a law firm to help handle the name addition process.

At Donny Wong & Co., our process is to first check with the client whether the Property is under a Bank loan.

• If the Property is not under any Bank loan, we can directly proceed with the name addition process.

• But if the Property is under a Bank loan, we offer two options:

Option 1: Settle the home loan in full.

Option 2: If paying it off in a short time isn’t feasible, we suggest the client refinance the Property. This means applying for a new home loan (commonly referred to as “reloan” or refinancing).

Only then can our firm retrieve the original Title deed from the Bank (which has been charged as collateral) and proceed with the name addition or transfer.

Clients should also be prepared to pay legal fees and stamp duties for both the name addition/ownership transfer as well as the refinancing process. The stamp duty for adding or transferring names is calculated based on the government’s assessed market value of the Property.

BUT HERE'S THE GOOD NEWS:

• Transfers between spouses are 100% exempt from stamp duty

• Transfers between parents and children are also 100% exempt

• Real Property Gains Tax (RPGT) is fully exempted for transfers between spouses, parents, and children, provided it is made based on love and affection, not as a sale or commercial transaction.

Also, in Malaysia, such transfers to spouse, child, or parent are exempt from Real Property Gains Tax (RPGT).

Transferring property to a loved one may seem like a simple gesture of affection, but it involves several legal and financial considerations, especially when a home loan is involved.

By understanding the correct procedures and available exemptions, you can avoid unexpected costs and delays. Whether you're planning to add your spouse’s name or pass the property to your children, it’s always best to consult with an experienced lawyer to ensure everything is done properly.

For more information about transferring your share in a Property, you can request a free quotation for the transfer of share legal fees from us today.

Please feel free to click this link: https://wa.me/60182886525 or contact us as below:-

FB page: https://www.facebook.com/messrsdwc

Instagram: https://www.instagram.com/donnywongnco

Website: www.dwc.com.my

Messrs. Donny Wong & Co.

📌: D2-U1-3 & 3A Solaris Dutamas (Publika), No. 1, Jalan Dutamas 1 50480 Kuala Lumpur

📞: (Conveyancing & Banking) +6011 1628 1943| +603 6420 1294

   (General) +6018 288 6525

✉️: askdwc@dwc.com.my 

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Legal Disclaimer

We trust that you have gained some information from this article. If you have any specific questions related to this article, please contact us at askdwc@dwc.com.my.

The article posted is for general information purposes only and should not be construed as legal advice. Facts and circumstances differ from case to case. Please consult your lawyer for specific legal advice and action to be taken.