Stamp Duty Guide

Stamp duty (duti setem) is a tax on legal documents, charged under the Stamp Act 1949 and administered by the Inland Revenue Board (LHDN). On a property purchase you pay it on the instruments that transfer ownership and secure your financing, not on the price as a single lump.

Two separate duties apply to a typical home purchase:

• Ad valorem duty on the instrument of transfer, commonly called the MOT (Memorandum of Transfer). This is charged on the property's value or the consideration, whichever is higher, on a tiered percentage scale.
• Duty on the loan or financing agreement, a flat percentage of the amount you borrow.

"Ad valorem" means the duty scales with value. The transfer duty uses a stepped scale, so different slices of the price are charged at different rates. The loan duty uses a single flat rate on the whole loan.

These are distinct from other purchase costs such as legal fees, valuation fees and, for sellers, Real Property Gains Tax. This guide covers the stamp duty computation: the tiers, the flat loan rate, the exemptions and the worked numbers. For the wider cost picture see the property guide and first-home guide.

The transfer duty on the MOT is tiered. Each band of the price is charged at its own rate, and the bands stack. Rates are current as of July 2026.

The rate is not applied flat to the whole price. On a RM 500,000 property you pay 1% on the first RM 100,000 and 2% on the next RM 400,000, so the tiers add up rather than jumping to a single rate for the whole amount.

Duty is calculated on the higher of the purchase price (consideration) or the market value assessed by the valuation authority. If a bargain price sits well below market value, the duty is worked out on the market value.

The same 1%-4% scale applies to Malaysian citizens and Malaysian permanent residents. Non-citizen individuals and foreign companies are charged differently from 1 January 2026 (see the foreign buyers section below).

When you take a mortgage or financing to buy the property, the loan or financing agreement itself is a chargeable instrument. The duty is a flat 0.5% of the total loan or financing amount, under Item 22(1) of the Stamp Act 1949.

Key points:

• It applies to the loan amount, not the property price. Borrow more and the duty rises in step.
• It is the same 0.5% for a conventional mortgage and for Islamic financing.
• It applies identically across buyer categories.

Example: a 90% loan on a RM 600,000 home is RM 540,000, so the loan agreement duty is RM 2,700 (0.5% of RM 540,000). A 90% loan on a RM 500,000 home is RM 450,000, giving RM 2,250.

For how loan sizing, rates and margin of finance work, see the mortgage guide. This guide covers the 0.5% duty on the agreement and the first-home waiver that can remove it.

Take a RM 600,000 property bought with a 90% loan (RM 540,000).

Transfer duty (MOT), stacking the tiers:

Loan agreement duty:

• 0.5% of RM 540,000 = RM 2,700

Total stamp duty on the purchase: RM 14,700 (RM 12,000 transfer + RM 2,700 loan).

If the same buyer were a first-time Malaysian homebuyer, this RM 600,000 home sits above the RM 500,000 exemption cap, so the full waiver would not apply and the RM 14,700 stands. A first-home buyer purchasing at RM 500,000 or below pays nothing on either instrument (see the next section).

First-time Malaysian homebuyers get a full stamp duty exemption on both the instrument of transfer and the loan agreement for a residential home priced up to RM 500,000. Budget 2026 extended this for two more years, to 31 December 2027.

Who qualifies:

• The purchaser, and any co-purchaser, must be a Malaysian citizen.
• The buyer must have never owned any residential property before, including property received by inheritance or gift, and whether held individually or jointly.
• A statutory declaration confirming first-home status must accompany the application.

How it is delivered: the exemption comes through two orders. The Stamp Duty (Exemption) Order 2021 covers the instrument of transfer, and the Stamp Duty (Exemption) (No. 2) Order 2021 covers the loan agreement. The original orders applied to Sale and Purchase Agreements executed from 1 January 2021 onward, now extended to 31 December 2027.

What full exemption means in ringgit: on a RM 500,000 first home, the buyer saves the RM 9,000 transfer duty (1% on 100k plus 2% on 400k) plus the 0.5% loan agreement duty, both waived to zero. Above RM 500,000 the exemption does not apply and the standard tiers are charged in full.

The first-home angle is summarised in the first-home guide; the full eligibility rules, the statutory declaration and the two orders are covered here.

From 1 January 2026, the transfer stamp duty on residential property bought by non-citizen individuals and foreign companies rises from a flat 4% to a flat 8%. This is a flat rate on the full value, not the tiered 1%-4% scale.

Who this hits: non-citizen individuals and foreign companies buying residential property in Malaysia.

Who this does not hit: Malaysian permanent residents are excluded from the 8% rate. PRs and citizens continue to pay the standard 1%-4% ad valorem tiers.

The 8% applies to the transfer instrument. The 0.5% loan agreement duty is unchanged and applies to all buyer categories. For investor strategy around foreign ownership and family holding structures, see the property investment guide; this guide holds the exact rates and thresholds.

Transfers of property between close family on grounds of "love and affection" get relief from stamp duty. The transferor must be a Malaysian citizen.

For a parent-child or grandparent-grandchild transfer, the first RM 1,000,000 of value carries no duty. Any value above that is charged on the normal ad valorem scale, then the duty on that balance is halved.

Worked illustration: a parent transferring a property worth RM 1,200,000 to a child pays no duty on the first RM 1,000,000. The RM 200,000 balance is charged ad valorem, then reduced by the 50% remission on that portion's duty.

Spousal transfers are fully exempt whatever the value, as long as the transferor is a Malaysian citizen.

Malaysia is moving from official assessment (where LHDN computes the duty) to a Stamp Duty Self-Assessment System (SDSAS), where the taxpayer computes and files the duty. It is filed through the e-Duti Setem (e-DS) platform, phased in over three stages:

Property transfers move to self-assessment from 1 January 2027 under Phase 2. Until then, transfer instruments continue under the existing process.

Payment deadline: stamp duty must be paid within 30 days of execution of the instrument, or of the return submission under self-assessment.

Transitional concession: no penalties will be imposed during 2026 for errors in self-assessment (BNDS) submissions, giving filers room to adjust to computing their own duty.

The self-assessment framework brings its own penalties for getting filing wrong.

• Failure to file a return (Section 72C): a fine of RM 10,000, or a penalty of RM 200 to RM 2,000.
• Underpayment or undercharge (Section 72D): a fine of RM 1,000 to RM 10,000 plus 100% of the undercharged amount, or a 100% penalty.

The transitional concession applies here too: no penalties will be imposed during 2026 for errors in BNDS self-assessment submissions. From 2027 onward the penalty regime applies in full, so accurate computation and timely filing matter once property transfers enter self-assessment.

Paying within the 30-day window and computing the correct duty on the higher of price or market value are the two things that keep you clear of these penalties.

Several further changes took effect on 1 January 2026.

• Property exchanges: where property is exchanged, the stamp duty is now borne solely by the grantee/transferee. Previously it was split equally between the parties.
• Refunds on cancelled agreements: applications to refund stamp duty on a rescinded or cancelled agreement are limited to 24 months from the date of execution. Miss that window and the refund is lost.
• Employment contracts: the stamp duty exemption threshold on employment contracts rises from RM 300 per month to RM 3,000 per month of employee earnings, effective 1 January 2026. This removes duty from a large share of ordinary employment contracts.

These sit alongside the headline property changes: the 8% foreign rate and the move to self-assessment.