Guide

The stamp is small money, until it is late money

Written by the Loankira editorial desk — Malaysian finance writers, every figure checked against BNM, LHDN, KWSP or PERKESO · Last reviewed: 22 October 2026

Stamp duty on a loan agreement is a 0.5% ad valorem charge on the facility amount under the Stamp Act 1949, commonly remitted to a nominal RM1 where the loan buys a residential home.

An unstamped loan agreement is not void, but it loses evidentiary comfort and attracts penalties. The rate is simple; the exemptions are where the savings are.

The rate: 0.5% of the loan amount

Under the Stamp Act 1949, loan and financing agreements are chargeable at 0.5% of the amount. RM300,000 borrowed: RM1,500. RM50,000: RM250. Where the stamp duty lands depends on who prepares the facility: bank home-loan letters of offer typically itemise it in the legal fees and disbursements, and you pay it inside the schedule; private loan agreements are stamped by the parties. Either way the liability exists; only the logistics differ.

The home-loan exemption: the RM1 rule

Loan agreements securing the purchase of residential property (and refinancing of the same) are commonly stamped at a nominal RM1 under the exemption instrument, rather than 0.5% of the facility. Conditions: the facility must be for purchase of the residential property and the agreement must say so. Cash-out portions beyond the purchase price can be chargeable; a pure refinancing of the same property generally inherits the concession. Have the lawyer confirm in writing which treatment applies to your structure before paying 0.5% unnecessarily.

Worked examples, three ways

Home purchase loan RM450,000, purchase-linked: RM1. Refinance of the same property, RM450,000, no extra cash-out: typically RM1. Personal loan RM60,000 from a bank: RM300, usually deducted in the payment schedule. Add RM10 per duplicate copy if needed. If a car hire-purchase is stamped, the HP schedule carries its own small duty handled by the bank's panel.

How stamping actually happens now

The LHDN STAMPS portal stamps digitally: the instrument is keyed in or uploaded, duty is paid by online banking or card, and a stamped PDF with the serial is generated instantly. Physical stamping at the LHDN cawangan still exists for originals with wet signatures. For bank facilities, the panel lawyer does this; for private loans, either party can, and the stamped copy should be kept with the agreement for the life of the loan plus years, because stamping status is checked when the document is ever used in enforcement.

Late stamping and penalties

An unstamped or late-stamped agreement is admissible in court only after paying the duty plus late penalties, which accrue on tiers (10% within 3 months, more after). The fix is mechanical, not fatal, but expensive relative to the duty. Diarise stamping at signing, not at dispute.

This guide is general information, not financial, tax or legal advice. Bank policies and rules change; confirm with your bank or the relevant agency.