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What is a Mortgage
A Mortgage is a document where the interest in immovable property or shares is transferred from the borrower to the lender as security for the repayment of a loan obtained under such an agreement.
Stamp duty is required to be paid on a Mortgage document.
If the document is signed under hand (signed but not under seal) where shares are used as a security, it is exempted from stamp duty.
Mortgage may include Equitable Mortgage and Variation of Mortgage.
Equitable Mortgage
Equitable mortgage is an agreement or a memorandum under hand only (signed but not under seal), relating to the deposit of title deeds of immovable property or creating a charge on the immovable property to secure the payment or repayment of money.
Stamp duty is payable only where immovable property is used as security.
If shares are used as a security and the document is signed under hand, it is exempted from stamp duty.
Variation to Mortgage
Variation to an open mortgage
If an additional loan is granted and secured under an existing open mortgage, the stamp duty payable will be the difference between $500 and the duty previously paid.
No further duty is payable if the existing open mortgage has been stamped for the maximum amount of $500.
Variation to a fixed mortgage
Where the amount secured under a mortgage is fixed initially, the mortgage will be stamped based on the fixed amount of the loan secured. This is subject to a maximum duty of $500.
If an additional loan is subsequently granted and a further mortgage on the same property is executed to secure the additional loan, the further mortgage is treated as a fresh security and is liable to full duty. This is also subject to the maximum duty of $500.
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What are the stamp duty rates and how to compute?
Stamp Duty Rates
Mortgage
Stamp Duty is computed based on the amount of facilities granted on mortgage of immovable property or stocks and shares. The stamp duty rate is as follows:
Based on the amount of facilities granted on mortgage of immovable property or stocks and shares
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Every $1,000 or part thereof
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$4 (Maximum duty payable is $500)
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Equitable Mortgage
The stamp duty rate is as follows:
Based on the amount of facilities granted on mortgage of immovable property
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Every $1,000 or part thereof
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$2 (Maximum duty payable is $500)
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Variation to Mortgage
The stamp duty rate is as follows:
Based on the amount of facilities granted on mortgage of immovable property or stocks and shares
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Every $1,000 or part thereof
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$4 (Maximum duty payable is $500)
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How to compute?
Mortgage
An example on the computation of stamp duty on mortgage, for a loan amount of $253,448, is as follows :
Computation of Stamp Duty on Mortgage
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1)
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Determine how many parts of $1,000 in the loan amount $253,448 (Round up to nearest thousand = $254,000)
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Computation
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= $254,000 / $1,000
= 254
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2)
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Stamp Duty
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= 254 x $4
= $1,016
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3)
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Stamp Duty Payable
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= $500
(The stamp duty computed above is more than $500. However, the duty payable is still $500 because the duty on mortgage is capped at the maximum amount of $500)
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Equitable Mortgage
An example on the computation of stamp duty on mortgage, for a loan amount of $150,000, is as follows :
Computation of Stamp Duty on Equitable Mortgage
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1)
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Determine how many parts of $1,000 in the loan amount
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Computation
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= $150,000 / $1,000
= $150
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2)
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Determine types of securities for loan
If property used as a security
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Stamp Duty Payable = $150 x $2
= $300
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If shares used as a security
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Stamp Duty Payable = exempted
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