Tenancy Agreement Stamping Fee Calculation in Malaysia

Signing a tenancy agreement is an important step in renting a property in Malaysia. But, did you know that stamp duty must be paid on the agreement? This fee, known as the tenancy agreement stamping fee, is required to be paid by law in order to make the agreement valid. In this article, we will discuss how to calculate the tenancy agreement stamping fee in Malaysia and what factors affect it.

Firstly, it’s important to understand that the stamp duty for a tenancy agreement varies depending on the length of the lease. There are 3 different categories of leases:

1. Lease of less than one year

2. Lease of one year or more but less than 3 years

3. Lease of 3 years or more

The stamp duty for each type of lease is calculated based on the annual rent of the property. In Malaysia, the standard stamp duty rates for tenancy agreements are as follows:

1. Lease of less than one year – RM1 for every RM250 or part thereof, of the total rent for the lease period.

2. Lease of one year or more but less than 3 years – RM2 for every RM250 or part thereof, of the total rent for the lease period.

3. Lease of 3 years or more – RM10 for every RM1,000 or part thereof, of the total rent for the lease period.

To calculate the stamp duty for your tenancy agreement, you need to follow the steps below:

Step 1: Determine the length of the lease

Step 2: Determine the annual rent of the property

Step 3: Use the standard rates above to calculate the stamp duty

For example, if you are signing a one-year lease for a property with an annual rent of RM12,000, the stamp duty calculation would look like this:

RM12,000 ÷ RM250 = 48 (rounded up)

48 x RM2 = RM96 (stamp duty)

It’s important to note that there are some factors that may affect the stamp duty calculation. For instance, if the total rent for the lease period is not fixed, then the stamp duty will be calculated based on the maximum possible rent that could be paid.

Additionally, if there are any additional clauses included in the tenancy agreement, such as a pet clause or early termination clause, these may also affect the stamp duty calculation. Therefore, it’s important to ensure that all terms of the agreement are clear and accounted for when calculating the stamp duty.

In conclusion, the tenancy agreement stamping fee is an important aspect of renting a property in Malaysia. By understanding the stamp duty rates and following the steps outlined above, you can ensure that you calculate the fee correctly. Make sure to check the tenancy agreement stamping fee with your real estate agent or lawyer to avoid any discrepancies.