The Stamp (Amendment) Bill 2016 was tabled for first reading in parliament on Nov 23 last year. Among other things, it proposes that ad valorem duty must be paid before the sales and purchase agreement (SPA) is signed. Under the current Act, the duty is paid in the later stages of the property-buying process.
The normal sequence of a transaction is that the parties come together, agree on the terms of the SPA and sign it. Then, the purchaser applies for a loan. After the loan has been secured, the bank makes the payments. Only after two to three months is the instrument of transfer stamped with ad valorem duty. But under the proposed amendments, the SPA will be the instrument that has to be stamped with ad valorem duty. That means purchasers will have to prepare the money needed for this even before they sign the agreement.”
Shawn also commented on the heftier penalties:
Previously, [provisions to recover any deficient or unpaid duties from the deceased] were never specified in the Act. But under the amendments, the collector is allowed to go after the executor of the estate for any outstanding duties. This includes penalties. If the buyer failed to pay a duty or penalty when he was alive, the stamp office will be able to claim the amount from the estate…
People tend to be lax about stamp duties. But once the bill is passed, they can no longer afford to do so. If they do not adhere to the new provisions, they will suffer the penalties, which will be a lot higher than what they are used to.”
You can read the full article here: Property Investing – Stricter Requirements for Property Buyers
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