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20180914 Stamp Duty on TA, who should pay?

20180914 (Fri)

Who should pay for the stamp duty on Tenancy Agreement? Tenant or Landlord?

This is a bit confusing because generally tax or duty is levied on the party that benefits from the income. Like income taxes and real property gains tax, those who received benefit should contribute to taxes, duties and fees. But, it is not always the case. There can be consumption taxes like VAT and GST. Those who spend pay the taxes.

On stamp duty, the party who purchase the house should pay stamp duty on transfer of property. In Stamp Act 1949, this is termed as conveyance. See 3rd Schedule of Stamp Act 1949. The seller gets paid but the transferee or purchaser pays for the stamp duty.

Similarly, tenant or lessee who lease the property from the landlord pays rental. In fact, he spent and not received income. Stamping the agreement, he is to pay for stamp duty on the tenancy agreement.

The seller and landlord are the originator of the dealings. Without them, there is no listing in the first place. However, when they receive the offer to purchase or rent, the contract is charged a stamp duty payable by the proposer or offeror.

Ref:

3rd Schedule, Stamp Act 1949.

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