Stamp duty is the largest upfront cost most Malaysian property buyers face after the down payment itself — yet it is the line item most investors spend the least time calculating. The standard advice is "budget 3-4% for stamp duty." That range is so broad it is effectively useless. On an RM 800,000 property, the difference between 3% and 4% is RM 8,000. You would not accept that margin of error on your rental yield estimate. Do not accept it on stamp duty either.
This guide breaks down exactly how stamp duty is calculated in Malaysia as of 2026, covers both Memorandum of Transfer (MOT) and loan agreement stamp duty, walks through worked examples at three price points, and explains the exemptions that could save you tens of thousands of ringgit.
What Is Stamp Duty?
When you buy a property in Malaysia, you pay stamp duty twice — on two separate legal documents.
1. MOT Stamp Duty (Memorandum of Transfer)
This is charged on the transfer of property ownership from seller to buyer. It is calculated on the purchase price or the market value of the property, whichever is higher. The legal basis is the First Schedule of the Stamp Act 1949, which sets out the official rate tables for all dutiable instruments.
2. Loan Agreement Stamp Duty
If you take out a mortgage or Islamic financing to fund the purchase, stamp duty is charged on the loan/financing agreement. This is a flat rate applied to the total loan amount.
Both are payable within 30 days of executing the respective documents. Late payment incurs penalties of up to 5% of the stamp duty amount for every additional 3 months, capped at 20%.
2026 MOT Stamp Duty Rates
The current rate schedule for MOT stamp duty on property transfers in Malaysia:
| Property Value Tranche | 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 rates are tiered — each tranche is taxed at its respective rate, not the entire purchase price at the highest applicable rate. This is a common source of confusion. An RM 600,000 property does not attract 3% on the full amount. It attracts 1% on the first RM 100K, 2% on the next RM 400K, and 3% on the remaining RM 100K.
Loan Agreement Stamp Duty
Straightforward: 0.5% of the total loan or financing amount.
Loan Stamp Duty = Loan Amount × 0.005
On a 90% LTV loan for an RM 800,000 property (loan amount RM 720,000), the loan stamp duty is RM 3,600.
For Islamic financing instruments like Musharakah Mutanaqisah or Bai Bithaman Ajil, the same 0.5% rate applies. The instrument is treated equivalently under the Stamp Act.
Worked Examples
Example 1: RM 500,000 Property
A common entry point for first-time Malaysian investors. Assume 90% LTV financing.
MOT Stamp Duty:
| Tranche | Value (RM) | Rate | Duty (RM) |
|---|---|---|---|
| First 100K | 100,000 | 1% | 1,000 |
| Next 400K | 400,000 | 2% | 8,000 |
| Total MOT Stamp Duty | 9,000 |
Loan Agreement Stamp Duty:
RM 450,000 × 0.5% = RM 2,250
Total stamp duty: RM 11,250 (2.25% of purchase price)
Example 2: RM 800,000 Property
Mid-range condo in the Klang Valley or Penang. Assume 90% LTV.
MOT Stamp Duty:
| Tranche | Value (RM) | Rate | Duty (RM) |
|---|---|---|---|
| First 100K | 100,000 | 1% | 1,000 |
| Next 400K | 400,000 | 2% | 8,000 |
| Next 300K | 300,000 | 3% | 9,000 |
| Total MOT Stamp Duty | 18,000 |
Loan Agreement Stamp Duty:
RM 720,000 × 0.5% = RM 3,600
Total stamp duty: RM 21,600 (2.70% of purchase price)
Example 3: RM 1,200,000 Property
Upper-range property that crosses the 4% threshold. Assume 90% LTV.
MOT Stamp Duty:
| Tranche | Value (RM) | Rate | Duty (RM) |
|---|---|---|---|
| First 100K | 100,000 | 1% | 1,000 |
| Next 400K | 400,000 | 2% | 8,000 |
| Next 500K | 500,000 | 3% | 15,000 |
| Remaining 200K | 200,000 | 4% | 8,000 |
| Total MOT Stamp Duty | 32,000 |
Loan Agreement Stamp Duty:
RM 1,080,000 × 0.5% = RM 5,400
Total stamp duty: RM 37,400 (3.12% of purchase price)
The effective stamp duty rate increases as property price rises: 2.25% at RM 500K, 2.70% at RM 800K, 3.12% at RM 1.2M. This non-linear scaling is why "budget 3%" is misleading — at lower price points, you overshoot; at higher price points, you undershoot once loan stamp duty is included.
The formula for MOT stamp duty, if you prefer to calculate directly:
MOT Stamp Duty = (RM 1,000) + (min(Price, 500,000) - 100,000) × 0.02 + max(0, min(Price, 1,000,000) - 500,000) × 0.03 + max(0, Price - 1,000,000) × 0.04
Or skip the math entirely and use our stamp duty calculator for instant results at any price point.
First-Time Buyer Exemptions
The Malaysian government has historically offered stamp duty exemptions to encourage first-time homeownership. These policies change with each budget cycle, so verify current status before relying on them.
Currently active exemptions:
-
Properties up to RM 500,000: According to Budget 2026, the first-time buyer stamp duty exemption has been extended until 31 December 2027. Malaysian citizens purchasing their first residential property priced up to RM500,000 receive 100% MOT stamp duty exemption. SPAs must be executed between 1 January 2026 and 31 December 2027.
-
Loan agreement stamp duty: Under the same extension, first-time buyers of properties up to RM 500,000 also receive 100% exemption on loan agreement stamp duty.
Impact of exemptions:
On an RM 480,000 property with 90% LTV:
- MOT stamp duty saved: RM 8,600
- Loan stamp duty saved: RM 2,160
- Total savings: RM 10,760
That RM 10,760 is equivalent to roughly 4 months of a typical mortgage payment. It directly improves your initial capital position and effective entry yield.
Eligibility criteria:
- Malaysian citizen
- First residential property purchase
- Property price at or below RM 500,000
- SPA executed between 1 January 2026 and 31 December 2027
- The property must be for own occupation (not investment) — though enforcement of this condition is limited in practice
HOC (Home Ownership Campaign) Incentives
The Home Ownership Campaign has been a recurring government initiative to stimulate the property market. When active, it offers:
- MOT stamp duty exemption (full or partial) for residential properties within a specified price range
- Developer discounts of at least 10% from the listed price
- Waiver of developer interest bearing charges (DIBS eligibility)
The HOC has been activated and deactivated multiple times — most recently it ran through 2023. As of February 2026, no active HOC campaign is in effect. However, these campaigns tend to be reintroduced when the property market softens, so it is worth monitoring.
When HOC is active, the stamp duty savings compound with any first-time buyer exemptions. On a RM 600,000 HOC-eligible property, total stamp duty savings could reach RM 13,000-15,000.
Stamp Duty for Foreign Buyers
Foreign buyers (non-Malaysian citizens) pay higher stamp duty rates than Malaysian citizens on residential property. Instead of the standard 1%/2%/3%/4% tiered schedule, foreign buyers are subject to a flat 8% stamp duty on the full residential property value under the foreign buyer surcharge. This is a significant cost increase — on an RM 1.5M property, the foreign buyer MOT stamp duty is RM 120,000 compared to RM 44,000 for a Malaysian citizen.
Foreign buyers also face additional cost layers:
1. No access to first-time buyer exemptions. These are restricted to Malaysian citizens.
2. State consent fees. Most states impose additional administrative charges for foreign buyer consent — typically 1-2% of the purchase price.
3. Minimum purchase price thresholds. Foreign buyers are restricted from purchasing properties below certain thresholds. These vary by state:
| State | Minimum Purchase Price (RM) |
|---|---|
| Kuala Lumpur | 1,000,000 |
| Selangor | 1,000,000 – 2,000,000 |
| Penang | 500,000 – 3,000,000 |
| Johor | 1,000,000 |
| Other states | 500,000 – 1,000,000 |
These thresholds push foreign buyers into even higher stamp duty territory. A foreigner cannot buy the RM 500,000 property from Example 1 above in most states — they are forced into the RM 1M+ range where MOT stamp duty at the 8% foreign buyer rate starts at RM 80,000.
Worked example for a Singaporean buying an RM 1.5M residential property:
| Item | Value (RM) | Rate | Duty (RM) |
|---|---|---|---|
| Full property value | 1,500,000 | 8% (foreign buyer flat rate) | 120,000 |
| MOT Stamp Duty | 120,000 |
Add the loan stamp duty (assuming 70% LTV for foreign buyer): RM 1,050,000 × 0.5% = RM 5,250
Total stamp duty for foreign buyer: RM 125,250 (8.35% of purchase price). Compare this to RM 49,250 (3.28%) for a Malaysian citizen buying the same property — the foreign buyer surcharge nearly triples the stamp duty cost.
For the full tax picture including rental income tax, RPGT, and transaction costs for Singaporean buyers, see our comprehensive tax guide for Singaporeans. For the step-by-step purchase process, see buying Malaysian property from Singapore. If you are a non-Singaporean foreigner, our foreigner property purchase guide covers the broader process.
How Stamp Duty Affects Your Investment Return
Stamp duty is a sunk cost — you pay it once and never recover it. But it directly impacts your effective entry yield and return on capital.
The yield impact formula:
Yield Drag = Total Stamp Duty ÷ (Purchase Price × Holding Period in Years)
On an RM 800,000 property with RM 21,600 total stamp duty:
- 5-year hold: 0.54% annual yield drag
- 10-year hold: 0.27% annual yield drag
- 20-year hold: 0.14% annual yield drag
The shorter your holding period, the more stamp duty hurts. For investors planning a 3-5 year hold, stamp duty can consume a meaningful portion of your total return. This is one reason why the optimal holding strategy for Malaysian property is generally 6+ years — it spreads the upfront costs thin enough to become insignificant while also clearing the RPGT threshold for Malaysian citizens (0% after year 5).
For a full analysis of all 12 recurring ownership costs beyond stamp duty, see our complete cost breakdown for Malaysian rental properties.
Stamp Duty on Sub-Sale vs Developer Purchase
An important distinction that catches some buyers:
Developer purchase (primary market): Stamp duty is calculated on the SPA price. Some developers offer to absorb stamp duty as a promotional incentive — always verify whether this is a genuine rebate or simply built into the asking price.
Sub-sale (secondary market): Stamp duty is calculated on the purchase price or the LHDN-assessed market value, whichever is higher. If you negotiate a below-market price, LHDN may still assess stamp duty based on their own valuation. This is called an adjudication — the stamp office determines the dutiable value.
If you believe the LHDN valuation is too high, you can appeal by submitting a formal valuation from a licensed valuer. The process takes 2-4 weeks and costs RM 500-2,000 for the valuation report.
Calculate Your Exact Stamp Duty
Every property is different. Rather than estimating with rough percentages, run your specific numbers through our tool.
Use our stamp duty calculator — enter the purchase price and financing amount to get exact MOT stamp duty, loan stamp duty, and total stamp duty figures instantly.
Stamp duty is one of the most predictable costs in property investing — the rates are fixed, the calculation is mechanical, and there is no ambiguity once you know the purchase price. The mistake most investors make is not getting the number wrong, but failing to include it in their return calculations at all. Every ringgit of stamp duty reduces your effective yield. Know the number. Factor it in. Then decide whether the deal still works.
Sources & Further Reading
- Stamp Act 1949, First Schedule — official rate tables for MOT and loan agreement stamp duty
- LHDN e-Duti Setem Portal — online stamp duty self-assessment system (replaced STAMPS from 1 Jan 2026)
- Budget 2026: Stamp Duty Exemption Extended — first-time homebuyer exemption details
- RDS Law Partners: Key Stamp Duty Changes 2026 — SDSAS self-assessment overview