Foreigners no longer pay the same stamp duty rates as Malaysians on the Memorandum of Transfer. From 1 January 2026, non-citizens (excluding permanent residents) pay a flat 8% stamp duty on residential property transfers — up from the previous flat 4% rate that applied from 2024. Malaysians continue paying tiered rates of 1-4%. This is a dramatic change. On top of that, state consent fees, lost first-time buyer exemptions, and higher down payment requirements widen the total acquisition cost gap between a foreigner and a Malaysian citizen buying the same property further.
This guide breaks down exactly what foreigners pay in stamp duty, what additional costs apply, what exemptions are off the table, and provides worked examples at price points typical for foreign buyers in Malaysia.
Stamp Duty Rates: Citizens vs Foreigners
Malaysian Citizens and Permanent Residents (Tiered Rates)
The tiered MOT stamp duty rates under Item 32(a), First Schedule of the Stamp Act 1949 apply to Malaysian citizens and permanent residents:
| Property Value Tranche | Stamp Duty Rate |
|---|---|
| First RM 100,000 | 1% |
| RM 100,001 - RM 500,000 | 2% |
| RM 500,001 - RM 1,000,000 | 3% |
| Above RM 1,000,000 | 4% |
These are marginal rates. Each tranche is taxed at its own rate. An RM 1.5M property does not attract 4% on the full amount. It is calculated in layers.
Non-Citizens and Foreign Companies (Flat 8% Rate)
Effective 1 January 2026, under Budget 2026, non-citizens (excluding permanent residents) and foreign-owned companies pay a flat 8% stamp duty on the transfer of residential property. This replaced the previous flat 4% rate that applied from 2024. The 8% rate applies to the full property value — not tiered. On an RM 1.5M property, a foreigner pays RM 120,000 in MOT stamp duty versus RM 44,000 for a Malaysian citizen.
This higher rate applies only to residential property (houses, condominiums, apartments, flats, service apartments, SOHOs used as dwellings). Commercial and industrial properties remain subject to the standard tiered rates for all buyers.
Loan agreement stamp duty remains the same for everyone: 0.5% of the total loan or financing amount under Item 22(1) of the Stamp Act 1949. No foreigner surcharge applies on loan agreements.
Malaysia's stamp duty regime became significantly less foreigner-friendly in 2026. While Singapore charges 60% ABSD and Hong Kong charges up to 15% BSD, Malaysia's flat 8% rate is lower in absolute terms — but represents a major shift from the zero-surcharge policy that previously applied.
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Stamp Duty Calculations for Typical Foreigner Price Points
Since foreigners must buy above state minimum thresholds — RM 1M in most states, RM 2M for landed in Selangor — the relevant price range starts at RM 1M. With the flat 8% rate effective from 1 January 2026, calculations are straightforward:
| Property Price (RM) | Foreigner MOT Stamp Duty (8% flat) (RM) | Malaysian Citizen MOT Stamp Duty (tiered) (RM) | Difference (RM) |
|---|---|---|---|
| 1,000,000 | 80,000 | 24,000 | 56,000 |
| 1,500,000 | 120,000 | 44,000 | 76,000 |
| 2,000,000 | 160,000 | 64,000 | 96,000 |
| 3,000,000 | 240,000 | 104,000 | 136,000 |
The calculation for foreigners is simple: Property Price x 8%. No tiers, no tranches. For Malaysians, the tiered calculation still applies under Item 32(a) of the Stamp Act 1949.
The cost gap is substantial. At RM 1.5M, a foreigner pays RM 76,000 more in stamp duty alone. At RM 3M, the gap widens to RM 136,000.
Quick formula for Malaysian citizens on properties above RM 1M: MOT stamp duty = RM 24,000 + 4% of the amount exceeding RM 1M. For an RM 1.5M property: RM 24,000 + (4% x RM 500,000) = RM 44,000. For foreigners: simply 8% x property price.
Extra Foreigner Costs Beyond Stamp Duty
Stamp duty is only one component of acquisition costs. Foreigners face several additional charges that Malaysian citizens do not — or pay at higher rates.
State Consent Fee
Every foreign property purchase requires state authority consent. The consent application carries a fee that varies by state. For a complete breakdown of minimum purchase prices and consent requirements per state, see our foreigner minimum price guide.
| State | Typical Consent Fee |
|---|---|
| Kuala Lumpur (Federal Territory) | RM 10,000 - RM 20,000 |
| Selangor | RM 10,000 - RM 20,000 |
| Penang | RM 10,000 + ~1% additional levy |
| Johor | RM 10,000 - RM 20,000 |
| Other states | RM 5,000 - RM 20,000 |
Penang's additional levy is the one that catches many foreigners off guard. Penang state charges an additional levy of approximately 1% on foreign property purchases — not technically stamp duty, but an acquisition cost that functions similarly. On an RM 1.5M property in Penang, that is an extra RM 15,000 on top of the consent fee.
Malaysian citizens buying the same property pay no consent fee and no state levy. This is a pure foreigner cost.
Lost First-Time Buyer Stamp Duty Exemption
Malaysian citizens buying their first residential property priced up to RM 500,000 are eligible for full stamp duty exemption on both the MOT and loan agreement, extended to 31 December 2027 under Budget 2026.
Foreigners are not eligible for any stamp duty exemption — first purchase or otherwise. This does not matter much in practice because foreigners cannot buy below RM 1M in most states anyway. But for the rare cases where the state threshold is lower (Labuan at RM 500K, Sabah strata at RM 600K), the exemption gap becomes meaningful.
Higher Down Payment
Not a stamp duty issue per se, but a direct acquisition cost difference. Malaysian citizens routinely get 90% LTV financing. Foreigners typically get 50-70% LTV. On an RM 1.5M property:
| Buyer Type | Typical LTV | Down Payment |
|---|---|---|
| Malaysian citizen | 90% | RM 150,000 |
| Foreigner (standard) | 60% | RM 600,000 |
| Foreigner (HSBC Premier) | 70% | RM 450,000 |
The difference in required cash outlay is RM 300,000 - RM 450,000. That capital has an opportunity cost.
Loan Stamp Duty Impact
Because foreigners borrow less (lower LTV), they actually pay less loan stamp duty. A citizen with 90% LTV on an RM 1.5M property pays loan stamp duty on RM 1.35M (= RM 6,750). A foreigner at 60% LTV pays on RM 900K (= RM 4,500). The savings here partially offset the higher consent fees — but only partially.
Total Acquisition Cost: Foreigner vs Malaysian Citizen
Here is the full comparison for an RM 1,500,000 property purchase — every line item, side by side.
| Cost Item | Malaysian Citizen | Foreigner (from 1 Jan 2026) |
|---|---|---|
| MOT stamp duty | RM 44,000 (tiered 1-4%) | RM 120,000 (flat 8%) |
| Loan stamp duty (0.5% of loan) | RM 6,750 (90% LTV) | RM 4,500 (60% LTV) |
| Legal fees — SPA (approx) | RM 15,000 | RM 15,000 |
| Legal fees — Loan (approx) | RM 12,000 | RM 12,000 |
| Valuation fee | RM 3,000 - RM 5,000 | RM 3,000 - RM 5,000 |
| State consent fee | RM 0 | RM 10,000 - RM 20,000 |
| State levy (Penang only) | RM 0 | ~RM 15,000 |
| Stamp duty exemption savings | RM 0 (not eligible at RM 1.5M) | RM 0 (not eligible) |
| Agent commission (if applicable) | 2-3% (RM 30K-45K) | 2-3% (RM 30K-45K) |
| Total (excl. agent, excl. Penang levy) | ~RM 80,750 | ~RM 164,500 - RM 177,000 |
| Total as % of purchase price | ~5.4% | ~11.0% - 11.8% |
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At the RM 1.5M price point, the stamp duty gap alone is RM 76,000 (RM 120,000 vs RM 44,000). Add the state consent fee (RM 10K-20K) and, if buying in Penang, the additional levy (~RM 15K), and the total cost difference reaches RM 84,000 - RM 96,000. This is a dramatic change from the pre-2026 regime where stamp duty was identical for all buyers.
Where the cost divergence compounds further: down payment. The citizen puts down RM 150K. The foreigner puts down RM 600K. That RM 450K differential in required cash, plus the RM 76K stamp duty gap, means a foreigner needs over RM 500K more in upfront cash than a citizen for the same property.
Stamp Duty on Resale (Selling as a Foreigner)
When you sell your Malaysian property, the buyer pays stamp duty on the MOT — not you. However, as a foreigner seller, you face RPGT which is distinct from stamp duty but functions as a significant exit cost.
The buyer's lawyer must also withhold 7% of the purchase price as RPGT retention (compared to 3% for citizen sellers). This does not affect your stamp duty calculation but affects your cash flow timing on exit.
For a complete analysis of RPGT rates and exemptions (or lack thereof) for foreigners, see our RPGT guide for foreigners, and the comprehensive RPGT Malaysia guide.
How Malaysia Compares to Regional Peers
The stamp duty comparison with other countries where foreigners commonly buy property:
| Country | Foreign Buyer Stamp Duty / Transfer Tax | Additional Foreign Surcharge |
|---|---|---|
| Malaysia | Flat 8% for residential (from 1 Jan 2026) | 8% flat vs 1-4% tiered for citizens |
| Singapore | 6% BSD (tiered) + 60% ABSD | 60% ABSD |
| Hong Kong | Up to 4.25% AVD + 15% BSD (non-PR) | 15% BSD |
| Thailand | 2% transfer fee (split buyer/seller) | None (but foreign ownership restricted to condos, max 49% of building) |
| Australia | Varies by state; VIC 8% surcharge, NSW 8% surcharge | 7-8% surcharge in major states |
| UK | Up to 12% SDLT + 2% non-resident surcharge | 2% surcharge |
Malaysia's flat 8% rate is now more expensive than Thailand and comparable to Australia, but still significantly cheaper than Singapore (60% ABSD) and Hong Kong (15% BSD). The barriers to foreign ownership in Malaysia now include stamp duty, minimum price thresholds, consent processes, and RPGT treatment.
How to Calculate Your Exact Number
Every property purchase has unique variables: state, property type, financing structure, and whether you are buying new (developer sale) or subsale (secondary market). Rather than estimating, calculate your exact stamp duty using our tools.
For MOT and loan stamp duty: Use our stamp duty calculator. Enter your purchase price and loan amount — it computes both MOT and loan stamp duty instantly.
For total acquisition costs as a foreign buyer: Use our foreign buyer costs calculator. Despite the name referencing Singapore buyers, it works for any foreign buyer. It includes stamp duty, legal fees, consent fees, and total cash required based on your expected LTV. You can also check whether a property meets the minimum price threshold for your state with our foreigner eligibility checker.
For the full guide on stamp duty rates, exemptions, and worked examples at all price points (including Malaysian citizen exemptions), see our stamp duty Malaysia guide.
For legal fees on both SPA and loan agreements, our legal fees guide has the regulated fee schedule and worked examples.
And for the complete overview of all rules governing foreign property purchases in Malaysia, start with our foreigner property guide.
Sources
- Stamp Act 1949 — First Schedule (LHDN) — MOT stamp duty rates (Item 32(a)) and loan agreement rates (Item 22(1))
- Malaysia to Double Stamp Duty for Foreign Buyers 2026 (Alestria Property) — Flat 8% rate for non-citizens from 1 January 2026, replacing previous 4% flat rate
- Budget 2026: Stamp Duty Exemptions Extended (RinggitPlus) — First-time buyer exemption extended to 31 December 2027 (citizens only)
- RPGT Rates (LHDN) — 30% within 5 years, 10% from year 6 for non-citizens
- Key Stamp Duty Changes from 1 January 2026 (RDS Law Partners) — Self-assessment regime and penalty changes
- A 2025-2026 Guide to Buying Residential Property in Malaysia for Foreigners (Global Law Experts) — Comprehensive foreigner purchase guide
Key Takeaways for Foreign Buyers
The stamp duty headline changed significantly in 2026. Foreigners now pay a flat 8% stamp duty on residential property transfers, double the previous 4% flat rate and substantially more than the 1-4% tiered rates paid by Malaysian citizens.
The cost disadvantages for foreigners are:
- Flat 8% stamp duty: On an RM 1.5M property, foreigners pay RM 120,000 vs RM 44,000 for citizens — a RM 76,000 gap
- State consent fees: RM 10,000 - RM 20,000 depending on state
- Penang additional levy: ~1% for foreign purchases (Penang-specific)
- No stamp duty exemptions: First-time buyer exemptions are citizen-only
- Rental income tax: 30% flat for non-residents — no personal reliefs
- Higher down payment: Lower LTV means 3-4x more cash upfront than a citizen
- RPGT on exit: 30% for the first 5 years, 10% from year 6 — with zero exemptions
Stamp duty is now a significant cost for foreigners in Malaysian property. The flat 8% rate, combined with RPGT on exit, the 30% flat tax on rental income for non-residents, and the capital locked up in a higher down payment, means total cost of ownership is materially higher than for citizens. Budget for all five layers.