Stamp duty is chargeable on instruments and not on transactions. If a transaction can be effected without creating an instrument of transfer, no duty is payable.
An unstamped or insufficiently stamped instrument is not admissible as evidence in a court of law, nor will it be acted upon by a public officer.
Assessment and payment of stamp duty can be made electronically via the Inland Revenue’s Stamp Assessment and Payment System (STAMPS system).
The rates of duty vary according to the nature of the instruments and transacted values.
Generally, transfer of properties can give rise to significant stamp duty:
|
Value (RM) |
Rate |
Duty payable (RM) |
||
On the first |
100,000 |
RM1 per RM100 or part thereof |
1,000 |
||
On the next |
400,000 |
RM2 per RM100 or part thereof |
8,000 |
||
On the next |
500,000 |
RM3 per RM100 or part thereof |
15,000 |
||
|
1,000,000 |
|
24,000 |
||
In excess of |
1,000,000 |
RM4 per RM100 or part thereof |
|
RM3 for every RM1,000 or any fraction thereof based on consideration, or value whichever is greater. The Stamp Office generally adopts one of the 2 methods for valuation of unlisted ordinary shares for purposes of stamp duty:
- net tangible assets; or
- sale consideration.
Shares or stock listed on Bursa Malaysia
RM1 for every RM1,000 or any fraction thereof based on the transaction value (increased to RM1.50 for every RM1,000 or fractional part of RM1,000 w.e.f. 1 January 2022).
Stamp duty of 0.5% on the value of the services / loans. However, stamp duty may be remitted in excess of 0.1% for the following instruments:
1. Service agreement
|
|
Stamp duty |
|
All service agreement (one tier) |
|
Ad valorem rate of 0.1% |
|
Multi-tier service agreement: a) Non-government contract (i.e. between private entity and service providers) |
First level |
Ad valorem rate of 0.1% |
|
Subsequent level(s) |
Up to RM50 |
||
b) Government contract (i.e. between Federal /State Government of Malaysia or State / local authority and service providers) |
First level |
Exempted |
|
Second level |
Ad valorem rate of 0.1% |
||
Subsequent level(s) |
Up to RM50 |
2. Loan agreement / loan instrument
Malaysian Ringgit (RM) loan agreements generally attract stamp duty at 0.5% However, a reduced stamp duty liability of 0.1% is available for RM loan agreements or RM loan instruments without security and repayable on demand or in single bullet repayment.
Stamp duty on foreign currency loan agreements is generally capped at RM2,000.
Instruments executed in Malaysia which are chargeable with duty must be stamped within 30 days from the date of execution. When the instruments are executed outside Malaysia, they must be stamped within 30 days after they have first been received in Malaysia.
The penalty imposed for late stamping varies based on the period of delay. The maximum penalty is RM100 or 20% of the deficient duty, whichever is higher.
Examples of the exemptions, remissions or reliefs of stamp duty available are as follows:
1. Merger and acquisition
Relief on the transfer of the undertakings or shares under a scheme of reconstruction or amalgamation of companies (conditions apply).
2. Financing instrument
Stamp duty on any instruments of an Asset Lease Agreement executed between a customer and a financier made under the Syariah principles for rescheduling or restructuring any existing Islamic financing facility is remitted to the extent of the duty that would be payable on the balance of the principal amount of the existing Islamic financing facility, provided instrument for existing Islamic financing facility has been duly stamped.
Stamp duty exemption on all instruments relating to the purchase of property by any financier for the purpose of leaseback under the principles of Syariah or any instrument by which the financier shall assume the contractual obligations of a customer under a principal sale and purchase agreement.
3. Instrument of transfer
4. Purchase of first residential property
Value of property & type of instrument (RM) |
Exemption |
Sale & Purchase agreement executed during the period |
Up to 500,000 |
100% |
1.1.2021 to 31.12.2025 |
Note 1 Purchase of first residential home by a Malaysian citizen
Full stamp duty exemption on the instrument of transfer in relation to the purchase of the first residential property valued at no more than RM500,000 by a Malaysian citizen under the National Housing Department’s Rent-to-Own (RTO) scheme. The exemption is given at 2 stages of transfer, i.e. from the property developer (PD) to a qualifying financial institution (FI), and from the FI to the Malaysian citizen. The exemption is subject to execution of the following agreements during the period from 1 January 2020 to 31 December 2022, i.e. sale and purchase agreement between the PD and FI and RTO agreement between the FI and the Malaysian citizen.
5. Home Ownership Campaign 2020/2021
Stamp duty exemption on the instrument of transfer and loan agreement for purchase of residential property valued more than RM300,000 but not exceeding RM2,500,000 by Malaysian citizens under the Home Ownership Campaign 2020/2021:
Value of property & type of instrument (RM) |
Stamp duty rate |
Sale & Purchase agreement executed during the period |
More than 300,000 – 2,500,000 |
Exempted RM3 for every RM100 |
1.6.2020 to 31.12.2021 |
More than 300,000 – 2,500,000 |
Full exemption 100% |
1.6.2020 to 31.12.2021 |
6. Abandoned housing projects
Stamp duty exemption on instruments executed by a rescuing contractor or a developer, that is a contractor or a developer who is appointed or approved by the Minister of Housing and Local Government to carry on rehabilitation works for an abandoned project. The instruments are loan agreements approved by the approved financier and instruments of transfer for the purpose of transferring revived residential property in relation to the abandoned project. This applies to instruments executed by the rescuing contractor or developer on or after 1 January 2013 but not later than 31 December 2025.
7. Others
- listed on a stock market of an approved stock exchange; or
- in companies in Malaysia or elsewhere between a local broker and an authorised nominee on behalf of a foreign broker.
W.e.f 1 January 2022, the stamp duty cap of RM200 is to be removed.
This publication is a quick reference guide outlining Malaysian tax information which is based on taxation laws and current practices. This booklet also incorporates in coloured italics the 2022 Malaysian Budget proposals based on the Budget 2022 announcement on 29 October 2021 and the Finance Bill 2021. These proposals will not become law until their enactment and may be amended in the course of their passage through Parliament.
This booklet is intended to provide a general guide to the subject matter and should not be regarded as a basis for ascertaining the liability to tax in specific circumstances. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by PricewaterhouseCoopers. Readers should not act on the basis of this publication without seeking professional advice.
Published by
PricewaterhouseCoopers Taxation Services Sdn Bhd (464731-M)
Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral,
P.O. Box 10192, 50706 Kuala Lumpur, Malaysia
Tel: 03-21731188 Fax: 03-21731288