What Is Stamp Duty in Malaysia and How Much Will You Pay?

Stamp duty is a government tax on legal documents. In property transactions in Malaysia, stamp duty applies to two key documents: the Sale and Purchase Agreement (SPA) and the loan agreement. Both can represent a significant portion of your upfront costs.

Stamp Duty on the SPA (Memorandum of Transfer/MOT)

Stamp duty on the SPA (technically levied on the Memorandum of Transfer once the SPA is presented for stamping) follows a tiered structure based on the transaction price:

| Transaction Price | Rate | |---|---| | First RM100,000 | 1% | | Next RM400,000 (RM100,001–RM500,000) | 2% | | Next RM500,000 (RM500,001–RM1,000,000) | 3% | | Above RM1,000,000 | 4% |

Example: For a RM650,000 property:

• RM100,000 × 1% = RM1,000
• RM400,000 × 2% = RM8,000
• RM150,000 × 3% = RM4,500
• Total: RM13,500

Stamp Duty on the Loan Agreement

The loan agreement attracts stamp duty at 0.5% of the total loan amount.

For a RM500,000 loan: RM500,000 × 0.5% = RM2,500

First-Time Buyer Exemptions

The Malaysian government periodically introduces stamp duty exemptions for first-time buyers. Check current exemption thresholds with your lawyer or the Inland Revenue Board (LHDN) directly, as campaigns change. Past exemptions have covered properties up to RM500,000 and in some campaigns up to RM1,000,000.

To qualify, the buyer must not have previously owned a residential property. This is checked against Inland Revenue records.

When Is Stamp Duty Payable?

Stamp duty becomes payable within 30 days of the document being executed. Late payment attracts penalties.

Your lawyer will typically advance stamp duty on your behalf and include it in their billing. For loan agreements, the bank's lawyer normally handles stamping and bills you separately.

Stamp Duty for Rental Agreements

Tenancy agreements also attract stamp duty, at a rate of RM1 for every RM250 of annual rent above RM2,400. For a monthly rent of RM2,000 (annual RM24,000):

• Stampable amount: RM24,000 − RM2,400 = RM21,600
• Stamp duty: RM21,600 ÷ RM250 = 86.4, rounded to 87 × RM1 = RM87

Foreign Buyers and Higher Rates

Foreign nationals purchasing Malaysian property may be subject to different stamp duty rates and minimum price thresholds, which vary by state. Verify current rules with a property lawyer before transacting.

---