Understanding Stamp Duty in Malaysia: Rates and Exemptions 2026

Stamp duty is one of the most significant transaction costs in Malaysian property and business dealings, yet it remains poorly understood by many. LHDN collected RM8.9 billion in stamp duty revenue in 2024, making it the third-largest tax revenue source after income tax and petroleum tax. Whether you are buying property, signing a tenancy agreement, or executing a business contract, stamp duty affects the cost. This guide breaks down the 2026 rates, available exemptions, and practical tips for managing stamp duty costs.

What Is Stamp Duty?

Stamp duty is a tax on legal documents and instruments. Under the Stamp Act 1949, certain documents must be "stamped" (having the duty paid) before they are considered legally complete. An unstamped document that requires stamping is not admissible as evidence in Malaysian courts.

The two types of stamp duty are:

• Ad valorem duty: Calculated as a percentage of the transaction value (used for property transfers, share transfers, loan agreements)
• Fixed duty: A flat amount regardless of value (used for some instruments like statutory declarations and articles of association)

Property Purchase Stamp Duty Rates (2026)

When purchasing property, stamp duty applies to the Memorandum of Transfer (MOT). The rates for 2026:

| Property Value | Stamp Duty Rate | |---|---|---| | First RM100,000 | 1% | | RM100,001 - RM500,000 | 2% | | RM500,001 - RM1,000,000 | 3% | | RM1,000,001 - RM1,500,000 | 3.5% | | Above RM1,500,000 | 4% |

Source: LHDN Stamp Duty Rates, effective 2026

Worked Example

For a property purchased at RM600,000:

• First RM100,000 x 1% = RM1,000
• Next RM400,000 x 2% = RM8,000
• Next RM100,000 x 3% = RM3,000
• Total stamp duty: RM12,000

This is paid by the buyer at the time of property transfer registration.

Loan Agreement Stamp Duty

Stamp duty on loan agreements (including mortgages) is 0.5% of the loan amount.

For a RM480,000 mortgage (80% of a RM600,000 property):

• Stamp duty: RM480,000 x 0.5% = RM2,400

This is typically included in the legal fees at the time of loan execution.

Tenancy Agreement Stamp Duty

For landlords and tenants, stamp duty on tenancy agreements is calculated as follows:

The annual rent is first reduced by RM2,400 (the exempt threshold). Duty is then applied to the remainder:

| Tenancy Duration | Rate on Excess Above RM2,400/Year | |---|---|---| | Up to 1 year | RM1 per RM250 | | 1-3 years | RM2 per RM250 | | More than 3 years | RM4 per RM250 |

Worked Example

For a tenancy at RM2,000/month (RM24,000/year) for a 1-year term:

• Annual rent: RM24,000
• Less exempt amount: RM2,400
• Dutiable amount: RM21,600
• Stamp duty: RM21,600 / 250 x RM1 = RM86.40

This is a minor cost but necessary for the agreement to be admissible in court.

"I regularly encounter landlords and tenants who skip stamping their tenancy agreements to save RM50-100," said Azzat Kamaludin, Partner at Azzat & Ira and conveyancing specialist. "Then when a dispute arises and they need to enforce the agreement in court, they discover the document is inadmissible. The cost of not stamping is orders of magnitude higher than the stamp duty itself."

Exemptions and Reliefs Available in 2026

First-Time Home Buyer Exemption

Malaysian citizens purchasing their first residential property valued up to RM500,000 receive a full stamp duty exemption on the MOT. For properties between RM500,001-RM1,000,000, the exemption applies to the first RM500,000 of the property value. This exemption applies to Sale and Purchase Agreements executed between 2025-2027.

Loan Agreement Exemption for First-Time Buyers

First-time home buyers also receive stamp duty exemption on loan agreements for properties up to RM500,000 (full exemption) or RM500,001-RM1,000,000 (exemption on the first RM500,000 of the loan).

Transfer Between Family Members

Transfers of property between spouses, or from parents to children (and vice versa), are subject to a nominal stamp duty of RM10 instead of ad valorem rates. This applies to transfers by way of love and affection (as opposed to sale).

SME Restructuring Relief

Business restructuring involving the transfer of property between related companies may qualify for stamp duty relief under Section 15A of the Stamp Act, subject to conditions including 90% common ownership.

Rescue Mechanism

The government periodically introduces stamp duty rescue mechanisms (remission of penalties for late stamping). Check LHDN's website for current amnesty programmes.

Practical Tips for Managing Stamp Duty

Tip 1: Factor Stamp Duty Into Your Budget

For property purchases, stamp duty on the MOT and loan agreement typically adds 3-4% to the purchase price. A RM600,000 property incurs approximately RM14,400 in stamp duty (RM12,000 MOT + RM2,400 loan). Budget for this upfront.

Tip 2: Stamp Tenancy Agreements Promptly

Tenancy agreements should be stamped within 30 days of execution. Late stamping incurs a penalty: RM25 if stamped within 3 months, 5% of the duty or RM25 (whichever is greater) if between 3-6 months, and 10% or RM50 if more than 6 months late.

EzLease tenancy agreements include stamping reminders and can be processed through LHDN's online stamp duty portal (stamps.hasil.gov.my) for convenience.

Tip 3: Check Exemption Eligibility Before Paying

First-time buyers often pay full stamp duty because they or their lawyer did not claim the available exemption. Confirm your eligibility before the MOT is submitted.

Tip 4: Use the Online Stamping System

LHDN's Stamp Assessment and Payment System (STAMPS) at stamps.hasil.gov.my allows online stamp duty assessment and payment. This is faster than visiting an LHDN branch and provides instant digital stamps.

Tip 5: Keep Stamped Documents Safe

Lost stamped documents are problematic. Keep originals in a secure location and make certified copies. Digital storage through platforms like EzLease provides backup access.

Stamp Duty on Other Business Documents

Beyond property, stamp duty applies to:

| Document | Stamp Duty | |---|---|---| | Share transfer (listed shares) | 0.15% of consideration | | Share transfer (unlisted shares) | 0.3% of consideration or net asset value | | Service agreements | Based on contract value | | Power of attorney | RM10 | | Partnership agreements | RM10 |

Service businesses that sign contracts with clients should check whether their agreements require stamping.

Frequently Asked Questions

Who pays stamp duty on a property purchase?

The buyer pays stamp duty on the Memorandum of Transfer (MOT). The buyer also pays stamp duty on the loan agreement. The seller does not pay stamp duty on the sale itself, though they may have RPGT obligations.

Who pays stamp duty on a tenancy agreement?

By convention, the tenant pays the stamp duty on the tenancy agreement. However, this is negotiable and can be split or borne entirely by the landlord if agreed. The tenancy agreement should specify who bears the stamping cost.

Can I stamp a document after the 30-day deadline?

Yes, but you will pay a penalty. Late stamping penalties range from RM25 to 10% of the duty amount depending on how late you stamp. LHDN occasionally runs amnesty programmes that waive penalties for late stamping.

Is stamp duty the same as legal fees?

No. Stamp duty is a tax paid to the government. Legal fees are professional fees paid to your lawyer for preparing and executing documents. When your lawyer quotes a total cost for a property transaction, it typically includes both stamp duty (paid to LHDN) and legal fees (retained by the law firm). Ask for a breakdown.

Key Takeaways

• LHDN collected RM8.9 billion in stamp duty in 2024, making it a significant cost for property buyers, landlords, and businesses
• Property purchase stamp duty ranges from 1-4% of the property value, adding approximately 3-4% to the total transaction cost
• First-time home buyers can save RM5,000-15,000 through stamp duty exemptions on properties up to RM1,000,000
• Tenancy agreement stamp duty costs only RM50-200 but is essential for legal enforceability in court
• Late stamping penalties are avoidable by stamping within 30 days of execution using LHDN's online STAMPS portal