Calculate your stamp duty amount for your tenancy agreement

For property investors that want to earn cash flow income from rental, it is important for them to know the process of preparing tenancy agreement, procedure to stamp the tenancy agreement and calculate the stamp duty amount for the tenancy agreement. Based on the extraction from inland revenue board Malaysia, the following is the guideline for the stamp duty calculation.

 

  • Tenancy agreement or lease that secures annual rental not exceeding RM2,400 is EXEMPTED from duty and it is not neccessary to submit the tenancy agreement to stamping office.  
  • For tenancy agreement with annual rental exceeding RM2,400, it will charge an amount of stamp duty for every RM250 or part thereof in excess of RM2,400 depending the lease period of the tenancy agreement.
  • For lease period not exceeding 1 year, it will charge RM1.00 for every RM250 or part thereof in excess of RM2,400 annual rental.
  • stamp-duty-calculation
    • For lease period exceeding one year but not exceeding three years, it will charge RM2.00 for every RM 250 after exceeding RM2,400 rental annually.
    • For lease period exceeding three years, it will charge RM4.00 for every RM 250 after exceeding RM2,400 rental annually,
    • If the consideration for tenancy constitutes or includes a PREMIUM, additional duty is chargeable and it is calculated on the amount of the premium at the rate chargeable on immovable property.
    • If the lease provides for differential rent, please contact The Deputy Collector of Stamp Duty in Inland Revenue Board for further information.

    Example of stamp duty calculation is as following.

    Mr. Lim rent out his condominium with RM900 monthly rental to his tenant for lease period of one year. His stamp duty calculation for this tenancy agreemet  will be as following.

    For that tenancy agreement, the annual rental will be RM900 X 12 = RM 10,800.

    Deduct the exempted amount  will be RM10,800 - RM 2,400 = RM 8,400.

    Since the lease period is only one year and not exceeding 1 year, the rate of stamp duty will be RM1.00 for every RM250 after exceeding RM2,400.

    The stamp duty calculation will be RM 8,400 / RM 250 X RM1 = RM33.6 and round up to RM 34. The stamp duty for Mr. Lim tenancy agreement will be RM 34. Mr. Lim can purchase RM34 of stamp hasil and then proceed to stamp the tenancy agreement.