Stamp Duty in Malaysia
Rising Global Consultants
What is Stamp Duty?
Stamp Duty
Stamp duty is an unavoidable cost in real estate transactions. According to the First Schedule of the Stamp Duty Act 1949, stamp duty is a statutory tax on legal documents related to real estate transfers, and all real estate transactions must pay this fee.
In Malaysia, stamp duty is divided into two main categories:
Fixed Duties: This tax system imposes a fixed stamp duty on legal documents or copies related to real estate transactions after they are stamped, usually with a stamp duty of RM10 per stamp
Ad Valorem Duties: This tax system charges according to the transaction value of the relevant legal documents, such as the value stated in real estate transfer agreements or loan contracts
The stamp duty for real estate transactions or transfers in Malaysia must be stamped and paid within 30 days from the execution date (document date). The stamp duty costs for purchasing property include:
- The stamp duty for a house sale and purchase agreement is RM10
- The stamp duty for the memorandum of transfer (MOT) or deed of assignment (DOA) for property title transfer is based on the transaction value of the real estate
- The stamp duty for a housing loan agreement is calculated at 0.5% of the total loan amount
Stamp duty exemption incentives for buying property in 2024
First-time homebuyers can enjoy stamp duty exemptions.
The government announced in the recent 2023 Budget that first-time homebuyers purchasing properties valued between RM500,001 and RM1,000,000 will receive a 75% stamp duty exemption until December 31, 2023. This stamp duty incentive is an increase from the 50% exemption announced in July 2022 under the i-MILIKI program.
Additionally, the government announced at the end of 2020 that the transfer documents and loan agreements for the first home valued up to RM500,000 would receive a full stamp duty exemption. This benefit applies to both new and existing properties.
To qualify for this exemption, the following conditions must be met:
- The sale and purchase agreement must be completed between January 1, 2021, and December 31, 2025, to qualify for this exemption
- This exemption applies only to residential properties and does not include SOHO/SOFO/SOVO types of properties, or commercial serviced residences
- First-time homebuyers must be Malaysian citizens
- Buyers must not own any other residential properties, including inherited or gifted properties, whether owned individually or jointly
- This stamp duty exemption includes two stages of property transfer: from the property developer to a qualified financial institution or bank, and from the bank to a Malaysian citizen
Property transfers between family members are exempt from stamp duty.
For property transfers or assignments between parents and children, or between grandparents and grandchildren due to familial relationships, the first RM1,000,000 of the property’s value will be exempt from stamp duty.
For the property value exceeding RM1,000,000, stamp duty will be calculated according to the stamp duty rates, with a 50% reduction. This exemption applies only to transfer documents executed starting April 1, 2023, and is limited to Malaysian citizens.
Abandoned property projects are exempt from stamp duty.
Contractors or property developers rescuing abandoned property projects are also eligible for stamp duty exemptions on legal documents (instruments) executed between January 1, 2013, and December 31, 2025. These contractors or developers must be appointed or approved by the Malaysian Ministry of Housing and Local Government to take over and rescue abandoned property projects.
These documents include loan agreements approved by authorized banks and transfer documents related to the “revival” of the abandoned projects.
Common stamp duty-related questions
| Property price | Stamp duty (as a percentage of property price) |
| First RM100,000 | 1% |
| The next RM400,000 (RM101,000 to RM500,000) | 2% |
| The amount exceeding RM500,000 and up to RM1,000,000 (RM500,001 to RM1,000,000) | 3% |
| The amount exceeding RM1,000,000 | 4% |
Assuming you purchase a property valued at RM750,000, the stamp duty for the memorandum of transfer and loan agreement would be as follows:
{(RM100,000 x 1%) + (RM400,000 x 2%) + (RM250,000 x 3%)} + 0.5% of the total loan amount (90% of RM750,000 x 0.5%) + SPA stamp duty RM10
= {RM1,000 + RM8,000 + RM7,500} + (RM675,000 x 0.5%) + RM10
= RM16,500 + RM3,375 + RM10
= RM19,885
The Memorandum of Transfer (MOT) is a document that must be signed by the buyer (for stratified or individual title) to transfer property ownership from the developer (new development projects) or the homeowner (secondary market properties) to the new buyer. The MOT only becomes legally effective after the stamp duty is paid to the Inland Revenue Board of Malaysia (LHDN) and the stamp duty certificate is issued by LHDN. The stamp duty is typically paid with the assistance of a lawyer hired by the buyer
MOT stamp duty can be paid online through LHDN’s Stamp Assessment And Payment System (STAMPS)
In addition to the property transfer agreement, when you take out a loan to purchase real estate, you will sign a loan agreement, which also requires stamp duty payment
In Malaysia, the stamp duty for housing loan documents is fixed at a 0.5% rate, meaning that regardless of the loan amount, the stamp duty on these documents is 0.5%
For example, if you purchase a property priced at RM500,000 and apply for a 90% housing loan, which is RM450,000, the total stamp duty you must pay for the loan documents is RM2,250 (RM450,000 x 0.5%)
The total stamp duty you need to pay for the transfer document (Instrument of Transfer) and the loan agreement for the RM500,000 house you purchased is:
Stamp duty on the property transfer document: RM9,000 + Stamp duty on the loan agreement: RM2,250 = RM11,250
Keep this stamp duty calculation and amount in mind, as it relates to the stamp duty exemption benefits we will inform you about next!
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