Q.
There is initial duty and additional duty. What is 'advance duty'?
A.
The issue of initial duty and additional duty came about because private valuer come out with different value for the immovable property compared to the JPPH valuation.
Effective 1 January 2008, private valuation by a practicing valuer is accepted for the determination of an “initial duty” payable in order to expedite the transfer of real property prior to the official JPPH valuation being issued.
As private valuation might differ from the JPPH Valuation, paying full stamp duty at this point might result in over payment. Hence, the initial duty is a portion of the final duty (which is yet to be decided).
As the final value will be known later and likely being higher, the additional duty will need to be paid as 'balance payment'. Notwithstanding, during the processing of the application, the Stamp Collector can make an assessment and ask for advance duty. This means extra amount is required to be paid before the final valuation is done.
Read below the verbatim of section 36AA regarding 'Advance duty'.
Advance duty
36AA.
(1) Notwithstanding sections 36 and 36A, the Collector may, on an application made by any person assess the advance duty for an instrument for the transfer of an immovable property where the consideration consists wholly of money.
(2) For the purposes of subsection (1), the Collector shall, prior to the market value of the immovable property being ascertained by a valuer employed by the Government for the purpose of subsection 36B(1A), ascertain the market value in advance for which the instrument referred to in that subsection is chargeable in accordance with the following formula:
where A is the money value of the consideration in respect of an instrument for the transfer of an immovable property as submitted by the person.
(3) The Collector shall assess the duty chargeable on the instrument referred to in subsection (1) based on the market value as ascertained in advance under subsection (2).
Ref:
S.36AA Stamp Act 1949.