Tenancy Agreement Stamp Duty in Malaysia

What changed in 2025

The Finance Act 2024 [Act 862] substituted the whole of Item 49(a) of the First Schedule to the Stamp Act 1949, with effect from 1 January 2025. Two things changed at once:

• The RM2,400 annual deduction was repealed. Duty is now charged on the whole annual rent, not on the excess above RM2,400.
• Rates rose and a fourth band was added. The scale was RM1, RM2 and RM4 per unit. It is now RM1, RM3, RM5 and RM7.

The Attorney General’s Chambers’ own consolidated text of the Stamp Act still prints the repealed version, because it is dated 1 January 2024. It has to be read together with Act 862, not on its own — which is why so many secondary sources are wrong.

The current Item 49(a) scale

Duty is charged for every RM250 or part thereof of the average rent and other considerations calculated for a whole year. The rate per unit depends on the lease term:

Watch the band boundaries. “Not exceeding one year” means an exactly 12-month tenancy is still in the first band. A 13-month tenancy moves to the second, where the rate is three times higher. Likewise exactly 36 months is still the second band, not the third. A month-to-month tenancy with no end date counts as an indefinite period — the top band.

A worked example

A house at RM1,500 a month on a two-year tenancy:

1. 1. Annual rent: RM1,500 × 12 = RM18,000
2. 2. Rounded up to whole RM250 units: 18,000 ÷ 250 = 72 units
3. 3. Two years sits in the “over 1 up to 3 years” band = RM3 per unit
4. 4. Duty: 72 × RM3 = RM216

Rounding is always up, with no pro rata — an annual rent of RM18,001 counts as 73 units, not 72.004. Under the repealed scale the same tenancy would have cost RM126, which is why other calculators still quote a lower figure.

Rent is not the only chargeable amount

Item 49 charges duty on the average rent and other considerations for a whole year, and the item’s description expressly reaches payments for the provision of services or facilities. So maintenance, facility and car park charges secured by the same agreement are part of the chargeable amount.

Security and utility deposits are not. They are refundable guarantees rather than consideration, so they stay out of the calculation.

The RM10 statutory minimum

Since 1 January 2025, section 36CB imposes a minimum of RM10 on any instrument whose duty is less than RM10, except cheques and contract notes. It is a general provision of the Act, not an Item 49 rule.

Low rents feel this most. A room at RM200 a month previously attracted no duty at all, because it sat inside the RM2,400 nil band. It now computes to RM10.

The landlord’s counterpart is not always RM10

Most tenancies are executed in two parts: the tenant’s original and the landlord’s counterpart. Item 34 charges the counterpart, but not at a flat rate. Under Item 34(a), where the original’s duty does not exceed RM10, the copy costs the same as the original. Only Item 34(b) — every other case — charges a flat RM10.

Who is liable

Item 8 of the Third Schedule is explicit: the tenant is liable on the tenancy agreement, and the landlord on the counterpart. Parties frequently agree otherwise between themselves, which is their right — but a private arrangement does not move the statutory liability if the duty goes unpaid.

Deadline and late penalties

Documents must be presented for stamping within 30 days of execution in Malaysia, under section 47.

Section 47A(1), as substituted by the Finance Act 2024 with effect from 1 January 2025, sets two tiers: RM50 or 10% of the deficient duty, whichever is greater, if stamped within three months of the deadline; and RM100 or 20%, whichever is greater, after that. The former three-tier scale starting at RM25 or 5% is repealed, though it is still widely quoted. Section 47A(2) lets the Collector reduce or remit, so these are ceilings rather than certainties.

From 2026, you make the assessment

Tenancy agreements fall within Phase 1 of the Self-Assessment Stamp Duty System (STSDS), in force from 1 January 2026. Previously you submitted the document and LHDN assessed the duty. Now the duty payer computes it and carries responsibility for its accuracy.

Section 36CA allows the Collector to raise an assessment or additional assessment within five years of the date the duty was paid or would have been paid, and at any time in a case of fraud, wilful default or negligence.

Those two facts compound: the rate changed in 2025, and from 2026 there is no counter that will correct your arithmetic before it is accepted.

Common questions