Stamp Duty & Fees for Malaysia Tenancy Agreements Explained

Introduction

This guide puts everything in plain language. You’ll learn the new 2025 tenancy stamp duty rates, how liability typically works, how to calculate the amount, the penalty schedule for late stamping, and the real-world costs to budget for. We’ll also share local data and practical tips so you can sign with confidence. For a full breakdown of all stamp duty categories, see Stamp Duty Malaysia 2025: Rates, Exemptions & STAMPS Guide.

Step 1 — Know the 2025 Tenancy Stamp Duty Rates

From 1 January 2025, Malaysia revised stamp duty for leases/tenancies. Instead of the old tiers (with the familiar annual-rent threshold), the new schedule applies a simple rate based on the length of the tenancy—RM1 per RM250 (or part thereof) for up to 1 year, RM3 per RM250 for >1 to 3 years, RM5 per RM250 for >3 to 5 years, and RM7 per RM250 for >5 years. A minimum duty of RM10 now applies on dutiable instruments with duty below RM10. Reference: PwC Budget 2025 Finance Bill summary PDF

What does that mean for you? If you intend to sign 24 months, you’ll likely fall under the RM3 per RM250 tier. If you stretch the lease past three years, the rate steps up again. The key is not to guess—run the numbers before you agree on the term.

 Step 2 — Who Pays, and Where Do You Stamp?

By default, stamp duty is levied on legal instruments, and liability for each type of instrument is set out in Malaysia’s Stamp Act 1949 (Third Schedule). In tenancy practice, parties often agree that tenants bear the duty, but you can contract otherwise—just make sure it’s spelled out in your agreement. You can submit for e-Stamping via LHDN’s STAMPS system or at an LHDN branch; always keep the digital certificate/receipt with the signed tenancy. See LHDN’s overview page.

A quick sanity check before you pay: confirm the final monthly rent and exact tenure on the signed draft, because a last-minute change—even RM50 or one extra month—will change the duty.

Step 3 — How to Calculate Tenancy Stamp Duty

The 2025 method is straightforward. First, compute the total rent over the lease term, then divide by RM250, round up to the next whole number, and multiply by the rate for your tenure.

Example A (12 months): RM1,800/month × 12 = RM21,600.
21,600 ÷ 250 = 86.4 → 87.
Rate (≤1 year) = RM1 → Duty = 87 × RM1 = RM87.

Example B (24 months): RM2,200/month × 24 = RM52,800.
52,800 ÷ 250 = 211.2 → 212.
Rate (>1–3 years) = RM3 → Duty = 212 × RM3 = RM636.

Example C (48 months): RM1,500/month × 48 = RM72,000.
72,000 ÷ 250 = 288.
Rate (>3–5 years) = RM5 → Duty = 288 × RM5 = RM1,440.

These examples assume a straightforward residential tenancy with no extra “consideration” (e.g., lump-sum premiums). If your deal has unusual payments or staged rent, ask your lawyer to confirm the duty basis under the new rules.

Step 4 — Timing, Late Stamping Penalties & 2025 Self-Assessment

Under 2025 changes, the penalty schedule for late stamping was updated. Broadly, the tiers are now RM25 or 5% of the deficient duty (whichever is higher) if stamping is done not later than 3 months late; RM50 or 10% if >3 months but ≤6 months; and RM100 or 20% if >6 months late. Details: PwC Budget 2025 Finance Bill summary.

Malaysia is also moving toward a stamp duty self-assessment model, where you (or your representative) declare and pay via STAMPS; so keep your calculations, tenancy, and payment proof tidy. In short: stamp promptly and file accurately—late stamping is a tax you don’t need to pay.

Step 5 — What Counts as “Fees” Beyond Stamp Duty?

Landlords and tenants often confuse stamp duty with legal or administration fees. They’re separate. Stamp duty is a tax on the instrument; legal fees are what your lawyer charges to draft/review the tenancy; admin fees (if any) are charged by platforms or agencies for processing. These don’t replace stamp duty. If you’re using a template or platform, check whether their fee includes submission to LHDN; most don’t.

One PJ landlord once assumed his platform fee covered everything; only at key handover did he find out the tenancy wasn’t stamped. The tenant couldn’t open a utility account without the stamped agreement, and both sides lost time—plus a rush to stamp with a penalty.

Step 6 — Renewals, Extensions & “11+11 Months” Tricks

Some try to save duty by signing 11 months now and a fresh 11 months later. In practice, you’ll pay duty again when you sign the new agreement. And if both parties intended a two-year stay from Day 1, splitting it into two instruments rarely saves money or hassle. Worse, mis-timed renewals create gaps that complicate deposit refunds and utility transfers.

A cleaner approach? Decide the term that suits both parties (12, 24, or 36–48 months), calculate duty upfront, and negotiate other clauses—rent review, minor repairs, and exit notice—so you don’t fight over the small stuff later.

Data & Insights

Tenancy cash-flow planning works better with a bit of context. Malaysia’s Consumer Price Index (CPI) shows the Housing, Utilities, Gas & Other Fuels group running around 1.3% y/y in mid-2025—a calmer backdrop than the spikes of recent years, but still a cost to watch when you set multi-year rent. OpenDOSM

Illustrative duty by rent & term (2025 rules):

Monthly Rent	12 months (RM1/250)	24 months (RM3/250)	48 months (RM5/250)
RM1,500	RM72	RM540	RM1,200
RM2,000	RM96	RM720	RM1,600
RM2,500	RM120	RM900	RM2,000

Insider Tips & Local Flavour

If you’re a tenant, ask the landlord to finalise rent, parking and furnished items list before stamping—changing any of these later might require a variation (and fresh stamping). For students or fresh grads, locking a 12-month term keeps duty low and gives flexibility if your internship or job changes.

If you’re a landlord, don’t skip stamping to “save a bit”. Many utilities and service providers will ask for a stamped agreement to open or transfer accounts. Also consider a two-year term if you want certainty; even with the RM3/250 tier, it can be cheaper than a one-year churn plus vacant months. Finally, keep your proof of e-Stamp handy—banks, insurers and even strata managements sometimes need it. If your rental property was inherited, you may learn more in Inheritance & Hibah Property Transfer in Malaysia: Probate, LA & Stamp Duty Guide.

FAQ Section

Q1: Is it compulsory to stamp a tenancy agreement?

Stamp duty is imposed on tenancy instruments under the Stamp Act 1949, and the payer is identified in the Act’s schedules. In practice, an unstamped agreement can cause problems when dealing with authorities or service providers, and penalties apply if you stamp late—so stamp promptly. (Hasil)

Q2: What are the latest rates for residential tenancies?

Effective 1 January 2025, the rates per RM250 (or part thereof) are: RM1 (up to 1 year), RM3 (>1–3 years), RM5 (>3–5 years), RM7 (>5 years). A minimum duty of RM10 applies to low-duty instruments. (PwC)

Q3: How bad are the late-stamping penalties now?

If you stamp ≤3 months late, it’s RM25 or 5% of the duty (whichever is higher). >3 to ≤6 months late is RM50 or 10%, and >6 months late is RM100 or 20%. Just stamp on time—it’s cheaper than any penalty. (PwC)

Q4: Who usually pays—the tenant or the landlord?

The Act specifies liability by instrument, but in residential practice tenants commonly pay (unless both parties agree otherwise). The cleanest way is to state it explicitly in the tenancy and ensure the stamping receipt is shared with both sides. (Hasil)

Q5: How are rent trends affecting tenancy planning?

With housing-related CPI running around ~1–2% y/y in mid-2025, most tenants and landlords are negotiating moderate year-two rent adjustments. A two-year tenancy can make sense for stability; just budget the 2025 duty tier for your chosen term. (OpenDOSM)

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