Buying a House from a Family Member in Malaysia: What You Need to Know

Yes, you can buy a house from a parent, sibling or other relative in Malaysia, and legally it is treated as a normal sale. There is still a sale and purchase agreement (SPA), a transfer that must be registered at the land office, stamp duty, real property gains tax (RPGT) filings and, if you are borrowing, a bank or LPPSA loan. Being family does not remove any of these steps. What it changes is the risk profile: family sales are often done informally, at a "family price", and that is exactly where problems with stamp duty, financing and other relatives tend to start.

This guide is about a genuine purchase, where the buyer pays a price. If no price is being paid and a parent is giving a property to a child out of love, that is a different transaction with different rules. See our guide on transferring property between family members and when it is a love and affection transfer.

Buying from family vs receiving a gift: what is the difference?

The two are easy to confuse, especially when the price is well below market value. The key question is whether money (consideration) is being paid for the property.

If you are unsure which one your family is actually doing, settle that first. Calling a transaction a "gift" when a price is in fact being paid, or the other way round, can create tax and documentation problems later.

Why families sell to each other

Common reasons include:

• keeping the family home within the family instead of selling to an outsider;

• a parent wanting to release some cash while a child takes over the house and the loan;

• one sibling buying out the others' interest in a jointly owned property; and

• helping a younger family member into home ownership at a fair but affordable price.

These are all legitimate reasons. But the sale is still subject to the same laws, land office procedures and tax rules as any other property sale.

The laws and procedures that still apply

For a family sale, the main framework includes:

• National Land Code 1965: the transfer must be registered at the land office or land registry, using the prescribed transfer form (Form 14A), and any restriction in interest on the title must be complied with.

• Strata Titles Act 1985: if the property is a strata unit (for example, a condominium or apartment).

• Stamp Act 1949: stamp duty on the instrument of transfer and on any loan agreement.

• Real Property Gains Tax Act 1976: RPGT filings by the seller and the buyer.

• State land office procedures: including any state consent required by the title.

• Your bank's or LPPSA's own requirements: if the purchase is financed.

Price and valuation: the "family price" problem

Many family sales are agreed at a price below market value. That is not unlawful, but it has consequences you should plan for.

Stamp duty is based on market value if it is higher

Stamp duty on the transfer is charged on the higher of the purchase price or the market value. So if you agree a family price of RM300,000 for a house worth RM450,000, duty is assessed on RM450,000.

The current tiers for the instrument of transfer are:

A loan agreement is stamped separately, generally at 0.5% of the loan amount. Stamp duty moved to a self-assessment system in phases from 1 January 2026, so the valuation you rely on matters even more. A first-home stamp duty exemption is available to qualifying buyers, subject to conditions; see our guide on stamp duty exemption for property transactions.

The bank lends on its own valuation

If you are taking a loan, the bank decides how much it will lend based on the agreed price, its own valuation and its lending policy. A below-market price usually means a smaller loan, but the cash you need for stamp duty, which is calculated on market value, may be higher than you expect. Ask the bank early whether it finances purchases between family members and what documents it will want.

Get an independent valuation

A valuation by a registered valuer gives everyone a clear reference point. It helps the family agree a fair price, supports the stamp duty position and reduces the chance of other relatives later claiming the property was sold too cheaply.

RPGT: the seller's and buyer's obligations

A sale between family members is a disposal and an acquisition for RPGT purposes, just like any other sale. Based on the current guidance from LHDN (the Inland Revenue Board):

• the seller submits Form CKHT 1A (or CKHT 1B for a company) within 60 days of the disposal, together with Form CKHT 3 where applicable;

• the buyer submits Form CKHT 2A within 60 days of the acquisition;

• the buyer must retain part of the purchase price (3%, 5% or 7%, depending on the seller's category) and remit it to LHDN within 60 days of the disposal; and

• for Malaysian citizens and permanent residents, RPGT is 30% for disposals within three years of acquisition, 20% in the fourth year, 15% in the fifth year and nil from the sixth year onwards.

RPGT has operated on self-assessment since 1 January 2025, so the seller is responsible for working out the gain and the tax payable. The reliefs available for gifts between close family members do not simply carry over to a sale because the parties are related.

Step by step: how a family sale should be done

1. Agree the basic terms between you: price, deposit, who pays which costs, the completion timeline, what furniture is included and whether anyone will continue living in the house.

2. Check the title. A land search confirms the registered owner, any bank charge, caveats and restrictions in interest. If the title requires state consent for a transfer or a charge, that application must be built into the timeline.

3. Confirm the seller can sell. If the property is still in the name of a deceased parent, the estate must be dealt with first, through the right estate process, before it can be sold. See our guide on changing the name on a land and house title after a death. If the property is jointly owned, every registered owner must agree.

4. Get a valuation and apply for financing, if needed.

5. Sign the SPA, prepared or reviewed by lawyers. It should record the price, payment method, completion period, vacant possession and what happens if financing fails.

6. File the RPGT forms and handle the retention sum within the deadlines.

7. Stamp the transfer and any loan documents.

8. Redeem the seller's loan, if the property is still charged to a bank.

9. Register the transfer (and the buyer's charge, if any) at the land office.

10. Update the local council's assessment records and utility accounts into the buyer's name.

If the property does not yet have its own individual or strata title, the sale is usually documented by an assignment instead, and the buyer will later need a perfection of transfer once the title is issued.

Family-specific risks to plan for

Other family members may object later

The most common family property disputes arise years later, often after a parent has died. Siblings may say the property was sold too cheaply, that the price was never really paid, or that the sale was a disguised gift. To reduce that risk:

• document the sale properly with an SPA and a registered transfer;

• pay through traceable bank transfers, not cash;

• keep a record of the valuation and how the price was agreed; and

• consider being open with other family members about the sale.

Informal "pay later" arrangements

Some families transfer the title first and agree that the buyer will "pay slowly". If that is the intention, it needs careful documentation. An unpaid price with no written terms is a common source of disputes, and it can also confuse the tax position.

A parent who continues living in the house

If the seller will stay on after completion, record the arrangement in writing, for example as a licence or tenancy with clear terms. This protects both the new owner and the parent.

The seller's financial position

Even within a family, run a bankruptcy search on the seller. If the seller has been declared bankrupt, the property comes under the control of the Insolvency Department (Jabatan Insolvensi Malaysia), and the sale cannot proceed in the usual way without following that separate procedure.

Why each side should have its own lawyer

It is common for families to want to "keep it simple" with one lawyer. But the buyer and the seller have different interests: the seller wants to be paid and released from their loan; the buyer wants a clean title and protection if something goes wrong. Where the seller does not appoint a lawyer, the buyer's lawyer acts for the buyer only.

A property lawyer will typically:

• carry out the land and bankruptcy searches;

• prepare or review the SPA and the transfer;

• deal with the RPGT filings and retention sum;

• arrange stamping of the transfer and loan documents;

• coordinate the redemption of the seller's loan; and

• present the transfer and charge for registration.

Legal fees for the SPA and the loan agreement in Peninsular Malaysia are governed by the Solicitors' Remuneration Order 2023. See our guide on legal fees for buying and selling a house.

How ASCOLAW can help

If your family is planning a sale, ASCOLAW (Messrs Akmal Saufi & Co) can check the title, confirm whether the transaction should be a sale or a love and affection transfer, prepare or review the SPA and transfer documents, and coordinate the stamp duty, RPGT and financing steps. Fill in the ASCOLAW enquiry form below with the property details, the relationship between the seller and buyer, the agreed price and whether a loan is involved, and our team will contact you.

Frequently asked questions

Can I buy my parents' house at a price below market value?

Yes, a family can agree a lower price. But stamp duty is charged on the higher of the price or the market value, and the bank will lend based on its own valuation, so plan your cash needs accordingly.

Is buying from a family member the same as a love and affection transfer?

No. If a price is paid, it is a sale. A love and affection transfer is a gift with no purchase price, and it follows different stamp duty and RPGT rules.

Can I get a housing loan to buy from a sibling or parent?

It is possible, but it depends on the bank's or LPPSA's own policy and valuation. Ask the financier early and tell them the seller is a family member.

Do we still need to file RPGT forms if the seller is my parent?

Yes. A sale between family members is a normal disposal and acquisition, so the seller and buyer must each file their RPGT forms, and the buyer must handle the retention sum within the deadlines.

My late father's house is still in his name. Can my brother sell it to me?

Not directly. The estate must first be administered and the person with legal authority (such as the administrator) confirmed. Only then can the property be transferred or sold.

This article is general information only and is not legal advice. It is written mainly for property in Peninsular Malaysia; land procedures in Sabah and Sarawak differ. Get advice on your own documents and circumstances before taking action.

Related guides

• Transferring Property Between Family Members in Malaysia: When Is It a Love and Affection Transfer?

• Land Title Transfer Procedure in Malaysia

• Legal Fees for Buying and Selling a House in Malaysia (2026 Guide)

• Stamp Duty Exemption for Property Transaction in Malaysia

• Simple Guide to Changing the Name on a Land and House Title After a Death