Kuan Zi Yi v PEMUNGUT DUTI SETEM

Case Significance

Illustrates that the Minister of Finance's power under section 80 of the Stamp Act 1949 to delimit exemptions supports treating service apartments and other commercially-featured residential properties as ineligible for the residential stamp-duty exemption under P.U.(A) 53/2021.

This High Court decision, delivered in Bahasa Malaysia, concerns an appeal against the Collector of Stamp Duty's refusal to grant a residential-property stamp-duty exemption, and whether a "service apartment" qualifies. The applicant had purchased an apartment described as being subject to an express condition of "service apartment" and applied, under the Stamp Duty (Exemption) Order 2021 (P.U.(A) 53/2021), for an exemption from stamp duty on the instrument of transfer, contending that the property was not truly a service apartment but had been bought as his residence. The Collector, relying on published frequently-asked-questions and internal guidelines that treat service apartments as ineligible, imposed stamp duty of RM4,800.00. A point of tension arose because the statutory declaration required for the exemption asked the applicant to confirm that the residential property did not include a small office home office (SOHO), small office flexible office (SOFO), small office virtual office (SOVO) or service apartment, which the applicant said was inconsistent with the terms of the Exemption Order. The court examined the scheme of the Stamp Act 1949 and the Exemption Order, observing that the fixing of duty is a form of revenue that falls under the Minister of Finance, and that under section 80 of the Stamp Act the Minister is empowered to determine that instruments relating to properties bearing commercial characteristics — such as a SOHO, capable of both residential and office use — are not exempt. Finding no error in the Collector's decision to treat the applicant's property as subject to duty on those grounds, the court dismissed the application. The judgment illustrates the breadth of the Minister's power to delimit stamp-duty exemptions and the treatment of hybrid or commercially-featured residential properties. The court's approach reflected that stamp-duty exemptions are creatures of statute to be construed within the scheme the legislature and the Minister have laid down, so that an applicant cannot claim an exemption for a property whose classification places it outside the category the Exemption Order was intended to relieve.