Guide

Stamp duty on property: the cost every buyer forgets to budget

Ask a first-time buyer in Malaysia what a house costs and they will quote the price. Ask what it costs to actually complete the purchase and most have no idea. Stamp duty is a lump sum payable to the government on the legal documents, and on a typical purchase it runs into tens of thousands of ringgit — due within 30 days, whether or not you planned for it.

The two documents that get stamped

When you buy property with a loan, two main instruments attract ad valorem stamp duty. The first is the Memorandum of Transfer (MOT) — the document that moves ownership from seller to you — stamped on the property price. The second is the loan agreement (Memorandum of Charge), stamped at 0.5% of the loan amount. There are smaller documents too (the sale agreement and its addenda), but these two are the big ones.

The MOT bands

MOT duty is calculated slice by slice, like income tax:

• First RM100,000 → 1% = RM1,000
• Next RM400,000 → 2% = RM8,000
• Next RM500,000 → 3% = RM15,000
• Everything above RM1,000,000 → 4%

Worked examples. A RM500,000 home: 1% on the first 100k (RM1,000) plus 2% on the next 400k (RM8,000) = RM9,000. A RM1.2 million home: RM1,000 + RM8,000 + RM15,000 on the first million, plus 4% on the extra RM200k (RM8,000) = RM32,000. Notice the duty is not a flat percentage — the effective rate rises with price as more of the value falls into the higher bands.

Who pays, and when

By convention in most of Peninsular Malaysia, the buyer pays the MOT duty and the buyer also pays the loan stamp on their own financing. The sale-and-purchase agreement can shift this, but "buyer pays all" is the default expectation. The legal deadline is 30 days from executing the document. Late stamping attracts penalties that escalate with the delay, so do not let your lawyer "get around to it" — confirm the stamped receipts as part of completion.

Real totals on common prices

Take a RM500,000 purchase with a 90% loan (RM450,000). MOT duty RM9,000. Loan stamp 0.5% × 450,000 = RM2,250. Add legal fees and you are looking at roughly RM15,000–RM16,000 of non-price closing costs on top of the RM50,000 down payment. That is over RM65,000 you need before you get the keys, on a house listed at RM500,000. This is why the cash-to-complete calculator exists: the listing price is not the cash requirement.

Transfers between family, and other special cases

Transfers between spouses are exempt from stamp duty in Malaysia. Parent-to-child and other family transfers get reduced rates under specific conditions. Inheritance transfers have their own treatment. Each has paperwork requirements and conditions — these are not automatic and you should confirm the current rules and required documents with LHDN or your lawyer before counting on any exemption.

Check before you commit

Stamp duty rates and exemptions are Budget-sensitive — remissions for first-time buyers and home-timber changes have appeared and disappeared across recent budgets. The figures in this guide reflect the commonly cited ad valorem bands; the authority is LHDN's stamp duty pages at hasil.gov.my. Use the stamp calculator for a quick figure on your own price point, and read the first-home exemption guide before assuming you are or are not covered.

This guide is general information, not legal or financial advice. Stamp duty rules change with each Budget. Verify current rates with LHDN (hasil.gov.my) or a qualified lawyer.