Stamp Duty Rate on Tenancy Agreement in Malaysia: Everything You Need to Know
When it comes to renting a property in Malaysia, a tenancy agreement is an important legal document that outlines the rights and responsibilities of both the landlord and the tenant. And just like any other legal document, a tenancy agreement needs to be stamped in order to be considered valid and enforceable. But what exactly is stamp duty, and how much does it cost? Here’s everything you need to know.
What is Stamp Duty?
Stamp duty is a tax charged on legal documents, including tenancy agreements, in order to make them legally valid. It is a form of revenue for the government and is paid by the person responsible for the document. In the case of tenancy agreements, the tenant is usually responsible for paying stamp duty.
How Much Does Stamp Duty Cost?
The amount of stamp duty payable on a tenancy agreement in Malaysia depends on the length of the tenancy and the monthly rental amount. The current stamp duty rates for tenancy agreements in Malaysia are as follows:
– For tenancies of less than one year: Stamp duty is calculated at the rate of RM1 for every RM250 of the monthly rental amount, subject to the minimum of RM1.
– For tenancies of one year or more but less than three years: Stamp duty is calculated at the rate of RM2 for every RM250 of the monthly rental amount, subject to the minimum of RM2.
– For tenancies of three years or more: Stamp duty is calculated at the rate of RM2 for every RM250 of the monthly rental amount, subject to the minimum of RM2. However, for tenancies of three years or more where rent is paid upfront, the stamp duty payable is a flat rate of RM1,000.
For example, if you are renting a property for RM3,000 per month on a one-year tenancy agreement, the stamp duty payable would be calculated as follows:
RM3,000 divided by RM250 = 12
12 multiplied by RM2 = RM24 (stamp duty payable)
When and Where to Pay Stamp Duty?
Stamp duty must be paid within 30 days of the signing of the tenancy agreement. The stamp duty payment can be made at any branch of the Inland Revenue Board (IRB) or via their online portal. The IRB will then stamp the tenancy agreement as proof of payment.
What Happens If Stamp Duty is Not Paid?
If stamp duty is not paid within 30 days of the signing of the tenancy agreement, it may be subject to a penalty of up to 10 times the original amount of stamp duty payable. In addition, an unstamped tenancy agreement cannot be used as evidence in court in the event of a dispute between the landlord and tenant.
Understanding the stamp duty rate on tenancy agreement in Malaysia is important for both landlords and tenants. As a tenant, it is your responsibility to ensure that stamp duty is paid on time to avoid any penalties. As a landlord, it is important to provide your tenant with a properly stamped tenancy agreement to ensure it is legally valid and enforceable.