Stamp Duty Assessment (Malaysia)

A Stamp Duty Assessment in Malaysia sets out the information or analysis it captures for compliance or operational use.

The Stamp Act 1949 (Act 378) was substantially amended by the Finance Act 2019 and Finance Act 2021. Under the Act, property transactions attract ad valorem duty under the First Schedule: for Sale and Purchase Agreements and instruments of transfer, duty is charged at 1% on the first RM 100,000, 2% on the next RM 400,000, 3% on the next RM 500,000, and 4% on amounts exceeding RM 1,000,000 of the property price or market value (whichever is higher). Loan agreements for property purchases attract a fixed stamp duty of 0.5% of the loan amount under Item 22(1)(b) of the First Schedule to the Stamp Act 1949.

Stamping of instruments in Malaysia is carried out through the LHDN e-Stamping portal (e-stamp.hasil.gov.my) or at any LHDN Stamp Duty office. An unstamped instrument is inadmissible as evidence in any civil proceedings in Malaysia under Section 52 of the Stamp Act 1949, unless the outstanding duty and penalty are paid before admission. The penalty for late stamping under Section 47A of the Stamp Act 1949 is RM 25, or an amount equal to five times the unpaid duty, whichever is greater.

For property purchased from developers under a Sale and Purchase Agreement regulated by the Housing Development (Control and Licensing) Act 1966 (Act 118), stamp duty on the SPA is assessed on the purchase price stated in the statutory form (Form 14A under Schedule H or Schedule I of the Housing Development Regulations 1989). For secondary market transactions, LHDN may reassess duty based on the market value determined by the Valuation and Property Services Department (JPPH, Jabatan Penilaian dan Perkhidmatan Harta) if the stated consideration is below market value.

The Malaysian government has periodically offered stamp duty exemptions for first-time home buyers under Budget announcements. Under Budget 2024, first-time buyers purchasing residential properties priced not exceeding RM 500,000 are exempt from stamp duty on the instrument of transfer and the loan agreement, subject to conditions under the relevant Exemption Order gazetted under Section 80 of the Stamp Act 1949.

The legal framework governing the Stamp Duty Assessment (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Stamp Duty Assessment (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Stamp Act 1949 (Act 378) sets the foundational requirements.

A Stamp Duty Assessment in Malaysia is required for every dutiable instrument that must be stamped before it can be used, filed in court, or registered.

A Stamp Duty Assessment is needed when executing a Sale and Purchase Agreement for a residential or commercial property in Malaysia. Under Item 32(a) of the First Schedule to the Stamp Act 1949, the instrument transferring property title must be stamped based on the purchase price or JPPH-assessed market value (whichever is higher). The SPA must be stamped within 30 days of execution for instruments executed in Malaysia, or within 30 days of receipt in Malaysia for instruments executed overseas.

A Stamp Duty Assessment is required when a property is transferred by way of a Memorandum of Transfer (Form 14A under the National Land Code 1965) at the state land registry (Pejabat Tanah dan Galian). The adjudication of stamp duty must be completed before the Memorandum of Transfer is accepted for registration at the land registry.

A Stamp Duty Assessment is needed for loan agreements and facility agreements executed in connection with property purchases. Under Item 22(1)(b) of the First Schedule to the Stamp Act 1949, a principal instrument of security for a loan — such as a deed of assignment, charge under the National Land Code 1965, or debenture — attracts stamp duty of 0.5% on the principal loan amount.

A Stamp Duty Assessment is required for tenancy agreements and leases. Under Item 22 of the First Schedule, the duty on a tenancy agreement is charged on the annual rent at specified rates depending on the lease term.

A Stamp Duty Assessment is needed when a company issues shares or increases its paid-up capital, as share issuance instruments attract duty under Item 32(b) of the First Schedule to the Stamp Act 1949.

A Stamp Duty Assessment is required for partnership agreements, deed of assignment of intellectual property, and instruments evidencing a settlement of a debt by transfer of property under Item 31 of the First Schedule.

A complete Stamp Duty Assessment for Malaysia must contain the following components to satisfy LHDN requirements under the Stamp Act 1949.

Instrument details: The type of dutiable instrument (e.g., Sale and Purchase Agreement, Memorandum of Transfer Form 14A, loan agreement, tenancy agreement), the date of execution, and the parties to the instrument. The instrument type determines which item of the First Schedule to the Stamp Act 1949 applies.

Property description: Full address, title number (Geran/Pajakan Negeri/Hakmilik Strata), lot number, state, and district of the property to which the instrument relates. For strata title properties, the parcel number under the Strata Titles Act 1985 must be stated.

Consideration and market value: The purchase price or consideration stated in the instrument, and the market value as assessed by the Valuation and Property Services Department (JPPH) if adjudication is required. Under Section 14(1) of the Stamp Act 1949, LHDN may call for a JPPH valuation where the stated consideration appears below market value.

Duty computation: The applicable duty rate from the First Schedule to the Stamp Act 1949, the dutiable amount, and the computed stamp duty payable. For tiered rates (as applies to instruments of transfer), the computation must be shown band by band.

Exemption or remission claimed: Where an exemption applies — such as the first-time buyer exemption under Budget 2024 or the remission for instruments of transfer pursuant to a court order — the relevant Exemption Order number and gazette reference must be stated.

Party responsible for stamping: By convention in Malaysia, the purchaser bears the cost of stamp duty on the Sale and Purchase Agreement and Memorandum of Transfer, while the borrower bears the cost on the loan agreement. The party responsible should be confirmed in the instrument.

Stamping deadline: Confirmation that the instrument will be stamped within 30 days of execution (for instruments executed in Malaysia) or within 30 days of receipt in Malaysia, to avoid late stamping penalties under Section 47A of the Stamp Act 1949.

Additional compliance elements for a Stamp Duty Assessment (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.