Stamp duty is one of the biggest upfront costs when buying property in Malaysia — yet many buyers only discover the full amount when their solicitor sends the bill. This guide cuts through the confusion and gives you a clear, accurate picture of every stamp duty charge you may face in 2026.
We cover everything: the tiered MOT rates, the loan agreement flat rate, tenancy stamp duty, the new foreigner 8% flat rate, first-time buyer exemptions extended by Budget 2026, legal fees under SRO 2023, and the special land law situation in Sabah and Sarawak.
1. What Is Stamp Duty in Malaysia?
Stamp duty in Malaysia is a tax levied on legal instruments (documents) — not on transactions themselves. It is governed by the Stamp Act 1949 and administered by the Inland Revenue Board of Malaysia (LHDN — Lembaga Hasil Dalam Negeri).
The key documents that attract stamp duty when you buy a property are:
- Memorandum of Transfer (MOT) / Deed of Assignment (DOA) — the main document transferring property ownership. This carries the highest stamp duty.
- Sale and Purchase Agreement (SPA) — fixed stamp duty of RM10 per copy.
- Loan/Financing Agreement — 0.5% flat on the loan amount.
There are two types of stamp duty: Ad Valorem (proportional to value) and Fixed (a set amount regardless of value). MOT duty is ad valorem; the SPA stamp is fixed.
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2. MOT Stamp Duty Rates for Malaysian Citizens & PRs
For Malaysian citizens and Permanent Residents (PRs), MOT stamp duty is calculated using a tiered (progressive) system on the higher of purchase price or LHDN market value:
| Value Band | Rate | Max Duty on This Band |
|---|---|---|
| First RM 100,000 | 1% | RM 1,000 |
| RM 100,001 – RM 500,000 | 2% | RM 8,000 |
| RM 500,001 – RM 1,000,000 | 3% | RM 15,000 |
| Above RM 1,000,000 | 4% | On excess amount |
Example: For a RM 650,000 property (Malaysian citizen):
- 1% × RM 100,000 = RM 1,000
- 2% × RM 400,000 = RM 8,000
- 3% × RM 150,000 = RM 4,500
- Total MOT duty = RM 13,500
Use our calculator to compute this instantly for any property price.
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3. First-Time Buyer Stamp Duty Exemption (Extended to 31 Dec 2027)
One of the most valuable benefits for Malaysian homebuyers is the first-time buyer stamp duty exemption. Under Budget 2026, this has been extended for SPAs signed up to 31 December 2027.
Who Qualifies?
- Must be a Malaysian citizen (not applicable to PRs or foreigners)
- Must have never previously owned any residential property in Malaysia (including gifts or joint ownership)
- Property must be residential (not commercial or industrial)
- Property value must be RM 500,000 or below
- SPA must be signed by 31 December 2027
What's Exempted?
- MOT stamp duty: 100% exempted (saves up to RM 9,000 on a RM500,000 property)
- Loan agreement stamp duty: also exempted for properties ≤ RM500,000 (under P.U.(A) 54/2021, extended to 31 Dec 2025 then reconfirmed)
- SPA stamp (RM10) still applies
- Legal fees under SRO 2023 still apply
Normal MOT duty would be RM 8,600. With the exemption: RM 0. That's RM 8,600 back in your pocket.
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4. Stamp Duty for Foreigners — The New 8% Rate (2026)
Effective 1 January 2026, foreigners (non-citizens and foreign-owned companies, excluding Malaysian PRs) purchasing residential property in Malaysia pay a flat stamp duty rate of 8% on the full property value. This is up from 4% previously, as announced in Malaysia's Budget 2026 (Finance Act 2025, Item 32(ab)).
| Buyer Type | Property Type | MOT Stamp Duty Rate |
|---|---|---|
| Malaysian Citizen / PR | Any | 1%–4% tiered |
| Foreigner | Residential | 8% flat (from 1 Jan 2026) |
| Foreigner | Non-Residential | 4% flat |
The loan agreement stamp duty (0.5%) and legal fees under SRO 2023 remain the same for all buyer types.
State minimum purchase prices for foreigners also apply: generally RM1,000,000 nationally; RM2,000,000 for Penang island; RM1,000,000 for Penang mainland; with varying thresholds in Johor's Iskandar zone. State authority consent may be required.
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5. Tenancy Agreement Stamp Duty
Tenancy agreements are also subject to stamp duty in Malaysia. The rate depends on the annual rent and the duration of the tenancy.
The formula for annual rent ≤ RM2,400/year: RM1 per RM250 or part thereof. Above RM2,400: RM2 per RM250. For leases exceeding 3 years, a higher rate (double) applies. The tenant's copy always attracts a fixed RM10.
Use the Tenancy tab in our calculator for an instant estimate.
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6. Legal Fees Under SRO 2023
Since 15 July 2023, legal fees for property transactions in Peninsular Malaysia are governed by the Solicitors' Remuneration Order 2023 (SRO 2023), which replaced the SRO 2005. This increased conveyancing fees.
| Value Band | SRO 2005 Rate | SRO 2023 Rate |
|---|---|---|
| First RM 500,000 | 1.0% | 1.25% |
| RM 500,001 – RM 7,500,000 | 0.8% | 1.0% |
| Above RM 7,500,000 | 0.7% | 0.8% |
The minimum fee is RM500. For HDA-governed transactions (new residential developments), discounts of 50%–75% of Table A rates apply, depending on price. Note: the same scale applies for the loan agreement's legal fees.
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7. Buying Property in Sabah & Sarawak — Key Differences
Sabah operates under the Sabah Land Ordinance (Chapter 68), not the National Land Code 1965. Property transfers may follow different procedures at the Sabah Land and Survey Department. Native Customary Rights (NCR) land in Sabah has specific restrictions.
Sarawak operates under the Sarawak Land Code (Chapter 81). It has its own categories of land: Mixed Zone land (can be owned by anyone), Native Area Land (restricted to natives), and Native Customary Rights land. Non-native buyers can only purchase Mixed Zone land.
While federal stamp duty rates under the Stamp Act 1949 apply across all states, the land registration process, required consents, and applicable restrictions differ significantly in Sabah and Sarawak.
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8. Family Transfers — Special Exemptions
Malaysia offers generous stamp duty concessions for property transfers between family members:
- Spouse to spouse: Full exemption (no value cap) — P.U.(A) 420/2007
- Parent to child / child to parent: Fixed stamp duty of RM10 (Budget 2024). Transferee must be a Malaysian citizen.
- Faraid / Will distribution: RM10 fixed stamp duty for beneficiaries relinquishing rights to eligible beneficiaries under a will, Faraid, or Distribution Act 1958.
- Transfers to siblings, grandchildren, in-laws: These do NOT qualify for special rates — standard tiered rates apply.
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9. How to Pay Stamp Duty — The LHDN Process
Stamping in Malaysia is handled by LHDN through its portal. As of 2026, Malaysia is transitioning to a Self-Assessment System (SAS) being phased in from 2026 to 2028. Under SAS, taxpayers (or their solicitors) calculate and pay stamp duty without prior adjudication.
- Your solicitor prepares the instrument (MOT, SPA, loan agreement)
- The document and supporting materials are submitted to LHDN via MyTax (mytax.hasil.gov.my)
- Under the current system, LHDN issues an assessment after adjudication
- You pay within 30 days of execution (or assessment notice)
- Once stamped, the transfer can be registered with the land office
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10. Late Stamping Penalties
Documents must be stamped within 30 days of execution (or 30 days of arrival in Malaysia if signed abroad). Effective January 2025, penalties are:
| Delay Period | Penalty |
|---|---|
| Up to 3 months late | 5% of deficient duty (min RM50) |
| 3 to 6 months late | 10% of deficient duty |
| More than 6 months late | 20% of deficient duty (max RM100 or 20%, whichever higher) |
Unstamped documents cannot be admitted as evidence in court proceedings, which can compromise your legal rights as a property owner.
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Conclusion
Stamp duty in Malaysia is a significant upfront cost that every buyer must budget for. The key points to remember for 2026:
- MOT duty is 1%–4% tiered for citizens/PRs; 8% flat for foreigners on residential
- First-time buyers under RM500,000 qualify for full MOT exemption until 31 Dec 2027
- Loan duty is a flat 0.5% for all buyer types
- Legal fees follow SRO 2023: 1.25% on the first RM500,000
- Sabah and Sarawak require a locally-registered solicitor
- Always stamp within 30 days to avoid penalties