Stamp Duty in Malaysia: Rates, Exemptions, Penalties & Compliance Guide 2025

Stamp duty remains a central component of Malaysia’s fiscal and regulatory framework. It formalises legal and commercial documentation, safeguards financial integrity, and provides the government with steady revenue.

Its application spans property transfers, financing arrangements, business transactions, and estate management, affecting individuals, corporations, investors and intermediaries across the economy.

Understanding Stamp Duty in Malaysia

Stamp duty is a tax levied on legal, commercial and financial instruments under the Stamp Act 1949. These include agreements, contracts, deeds, tenancy instruments, share transfer forms and other defined documents.

An unstamped instrument may still exist as a contract, but it will not be admissible in court and cannot legally effect certain rights such as property ownership transfer. Timely stamping is therefore essential.

Types of Stamp Duty

1. Ad Valorem Duty: A percentage calculated based on the transaction value. Applies to property transfers, share transfers and financing instruments.
2. Fixed Duty: A predetermined amount charged regardless of transaction value. Applies to agreements, powers of attorney and memoranda.

Documents Subject to Stamp Duty

1. Sale and purchase agreements for property
2. Memorandum of Transfer and Deed of Assignment
3. Loan agreements and financing instruments
4. Mortgages and security documents
5. Tenancy and lease agreements
6. Share transfer forms
7. Debentures and debt instruments
8. Partnership agreements
9. Insurance and takaful policies
10. Trust deeds and powers of attorney

Stamp Duty Rates in Malaysia

1. Property Transfers

1. First RM100,000 at 1%
2. Next RM400,000 at 2%
3. RM500,001 to RM1 million at 3%
4. Above RM1 million at 4%
5. Foreign companies: Flat 4%

2. Service and Loan Agreements

Typically charged at 0.5% of the total value, subject to remission rules.

3. Shares and Marketable Securities

1. Non-listed shares: RM3 per RM1,000 or part thereof
2. Bursa Malaysia listed shares: RM1.50 per RM1,000 (maximum RM1,000 per contract note between July 2023 – July 2028)
3. Listed marketable securities: RM1 per RM1,000 (maximum RM200 per contract note)

4. Sale and Purchase Agreement (SPA)

A fixed duty of RM10 applies to the SPA document.

Stamp Duty Payment Procedures

Stamp duty must be paid within 30 days of execution in Malaysia or within 30 days of arrival if executed overseas.

Payment Methods

1. STAMPS Portal: Electronic submission via LHDNM’s portal. A STAMP Certificate is issued as proof of payment.
2. Compound Duty: Combination of ad valorem and fixed duty for selected instruments.

Exemptions and Reliefs

1. First-time homebuyers: Full exemption for homes priced RM500,000 and below until 2025.
2. Family transfers: RM10 fixed duty under wills, Faraid or Distribution Act.
3. Insurance and takaful exemptions for selected SME policies until end 2025.
4. Corporate restructuring relief under Sections 15 and 15A.

Penalties for Late Stamping

1. Within 3 months: RM50 or 10% of unpaid duty (whichever higher)
2. After 3 months: RM100 or 20% of unpaid duty (whichever higher)

Consequences of Non-Compliance

1. Unstamped documents are not admissible in court proceedings.
2. Ownership transfers cannot be legally effected without stamping.
3. Risk of audits, penalties and regulatory delays.

Conclusion

Stamp duty remains fundamental to Malaysia’s legal and economic infrastructure. Proper classification, timely payment and awareness of exemptions are essential for maintaining compliance.

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