What is Stamp Duty?
Stamp duty is imposed on instruments, not on transactions. Instruments subject to stamp duty include agreements, contracts, deeds, licences, and other documents specified under the Stamp Act 1949.
Proper stamping is essential, as unstamped or insufficiently stamped instruments may face legal and evidential limitations in court proceedings.
Stamp Duty Amount
The amount of stamp duty payable depends on the nature of the instrument and, in some cases, the value of the transaction or property involved. Stamp duty generally falls into two categories:
1. Ad Valorem Duty: Ad valorem duty is calculated as a percentage of the value of the transaction or property. The applicable rate varies depending on the type of instrument and the consideration involved.
2. Fixed Duty: Fixed duty imposes a specific amount, regardless of the transaction value. This typically applies to certain agreements, licences, and statutory documents.
Types of Documents Subject to Stamp Duty
Stamp duty applies to documents that evidence or record transactions, including but not limited to:
- Sale and Purchase Agreements for immovable property
- Instruments of transfer (e.g. Memorandum of Transfer, Deed of Assignment)
- Loan and financing agreements
- Mortgage and security documents
- Lease and tenancy agreements (commercial and residential)
- Share transfer instruments
- Debentures
- Partnership agreements
- Memoranda of Understanding (MoU)
- Insurance policies
- Trust deeds
- Powers of Attorney
Stamp Duty Rates in Malaysia
(i) Stamp Duty on Sale and Purchase Agreements (SPA):
- RM10 per agreement, charged as fixed duty
- This is separate from stamp duty on the instrument of transfer
(ii) Stamp Duty on Instruments of Transfer (MOT / DOA)
The authorities calculate stamp duty based on the higher of the consideration or market value, using a tiered ad valorem rate:
| Property Value | Stamp Duty Rate |
| First RM100,000 | 1% |
| Next RM400,000 | 2% |
| RM500,001 – RM1,000,000 | 3% |
| Above RM1,000,000 | 4% |
Foreign purchasers and foreign-owned companies are subject to a flat stamp duty rate of 4% on property transfer instruments, effective 1 January 2024.
(iii) Stamp Duty on Service Agreements and Loan Agreements
- Generally subject to 0.5% stamp duty on the value of services or loan amount
- Certain instruments may enjoy remission, resulting in an effective rate of not more than 0.1%, subject to conditions
(iv) Stamp Duty on Shares and Securities
| Type of Instrument | Stamp Duty Rate | Maximum Duty |
| Non-listed shares / securities | RM3 for every RM1,000 or part thereof | No cap |
| Shares listed on Bursa Malaysia | RM1.50 for every RM1,000 or part thereof | RM1,000 per contract note (remission applies until 12 July 2028) |
| Listed marketable securities | RM1 for every RM1,000 or part thereof |
- Stamp Duty Payment & Procedures
You must pay stamp duty within 30 days of the execution date (or within 30 days of receiving the document in Malaysia if you executed it overseas).
Stamp duty payment methods include:
- STAMP Certificate
Electronic stamp certificates are issued when applications are submitted via LHDN’s STAMPS system.
- Late Payment of Stamp Duty
All instruments must be stamped within the prescribed timeframe.
- Penalties for Late Stamping
Effective from 1 January 2025:
- Within 3 months: RM50 or 10% of unpaid duty (whichever is higher)
- After 3 months: RM100 or 20% of unpaid duty (whichever is higher)
Future Developments: Self-Assessment System
Effective 1 January 2026, Malaysia will transition to a self-assessment system. Taxpayers will be responsible for their own assessments, and the Inland Revenue Board (IRBM) will utilize a Stamp Duty Audit Framework (introduced 1 January 2025) to ensure compliance through desk and field audits.
