Stamp Duty on Tenancy Agreements in Malaysia (2026 Rates)

An unstamped tenancy agreement is worth less than the paper it is printed on. That is not an exaggeration — under Section 52 of the Stamp Act 1949, an unstamped or insufficiently stamped document is inadmissible as evidence in any court proceeding. If your tenant stops paying rent, damages your property, or refuses to vacate, your tenancy agreement is the foundational document in any legal claim. Without proper stamping, you have no enforceable agreement. You have a suggestion.

The stamp duty cost itself is modest — typically RM 50-500 per year for most residential tenancies. The cost of not stamping, measured in months of irrecoverable unpaid rent and legal vulnerability, is orders of magnitude higher. This post covers the exact calculation method, worked examples, and the process for stamping your tenancy agreement.

Legal Requirement

Under Item 17(a) of the Stamp Act 1949, every tenancy agreement for property in Malaysia must be stamped. This is not optional, not dependent on the rental amount, and not waived for informal arrangements between friends or family members acting as landlord and tenant.

The stamping must be done within 30 days of signing the tenancy agreement. After 30 days, you can still stamp the agreement — but late stamping penalties apply.

The purpose of stamping is twofold:

1. It makes the document legally enforceable in Malaysian courts
2. It generates revenue for the government (stamp duty is a form of tax on legal instruments)

2026 Stamp Duty Rates for Tenancy Agreements

The stamp duty rate depends on two variables: the annual rent and the lease term.

Key details:

• No exemption threshold. As noted by RDS Law Partners, effective 1 January 2025, the RM 2,400 annual rent exemption has been removed. The full annual rent is now subject to stamp duty.

• Minimum stamp duty: RM 10. If the calculated stamp duty is less than RM 10, the minimum duty of RM 10 applies.

• "Part thereof" rounding. If the annual rent divided by RM 250 produces a fraction, it is rounded up to the next whole number. RM 18,000 ÷ 250 = 72 exactly, so 72 units.

• The formula:

Stamp Duty = ceiling(Annual Rent ÷ 250) × Rate per RM 250

Where the rate per RM 250 is RM 1, RM 3, RM 5, or RM 7 depending on the lease term.

Worked Examples

Example 1: RM 1,500/month, 1-Year Lease

This is a typical rental for a medium-range apartment or small condo unit.

• Annual rent: RM 1,500 × 12 = RM 18,000
• Number of RM 250 units: RM 18,000 ÷ 250 = 72
• Rate: RM 1 per RM 250 (lease ≤ 1 year)

Stamp Duty = 72 × RM 1 = RM 72

For a 1-year tenancy at RM 1,500/month, the stamp duty is RM 72 — roughly RM 6.00/month amortized. Negligible against the monthly rent.

Example 2: RM 2,500/month, 2-Year Lease

A mid-range condo in the Klang Valley with a standard 2-year tenancy.

• Annual rent: RM 2,500 × 12 = RM 30,000
• Number of RM 250 units: RM 30,000 ÷ 250 = 120
• Rate: RM 3 per RM 250 (lease 1-3 years)

Stamp Duty = 120 × RM 3 = RM 360

For a 2-year tenancy at RM 2,500/month, the stamp duty is RM 360 — approximately RM 15.00/month over the lease term.

Example 3: RM 3,500/month, 3-Year Lease

A higher-end rental with a long-term lease.

• Annual rent: RM 3,500 × 12 = RM 42,000
• Number of RM 250 units: RM 42,000 ÷ 250 = 168
• Rate: RM 3 per RM 250 (lease 1-3 years — a 3-year lease falls within the "not exceeding 3 years" band)

Stamp Duty = 168 × RM 3 = RM 504

For a 3-year tenancy at RM 3,500/month, the stamp duty is RM 504 — approximately RM 14.00/month over the lease term.

Summary Table

The stamp duty on a typical 1-year tenancy at RM 2,000/month is RM 96. That is less than half a day's rent. Compare this to the cost of losing a court case over unpaid rent because your agreement is inadmissible — potentially 3-6 months of rent at RM 6,000-12,000. The risk-reward calculation is not even close.

Who Pays?

Under the Stamp Act 1949, the lessee (tenant) is legally responsible for paying stamp duty on the tenancy agreement. This is the default legal position.

However, in practice, the arrangement is negotiable. Common approaches in the Malaysian rental market:

Many landlords pay the stamp duty as a goodwill gesture — especially in a competitive rental market where attracting and retaining quality tenants is paramount. On a 1-year lease at RM 2,000/month, you are talking about RM 96. Spending RM 96 to close a tenant who will pay RM 24,000 in rent over the year is a sensible investment.

For landlords claiming rental income tax deductions, stamp duty paid by the landlord is a deductible expense. So the actual after-tax cost is even lower.

Where and How to Stamp

Option 1: LHDN (Inland Revenue Board) Office

Bring the following to any LHDN branch:

• Two original copies of the signed tenancy agreement
• Payment for the stamp duty amount

The stamping is typically processed on the same day. LHDN will affix the stamp (or apply an impressed stamp) on the agreement and return it to you.

Option 2: STAMPS Online System

LHDN's Stamp Assessment and Payment System (STAMPS) allows online stamping:

1. Visit stamps.hasil.gov.my
2. Register for an account (if you do not have one)
3. Select "Tenancy" as the instrument type
4. Enter the tenancy details (rent amount, lease term, parties)
5. The system calculates the stamp duty automatically
6. Pay via FPX (online banking)
7. Print the e-Stamping certificate
8. Attach the certificate to the tenancy agreement

The online system is faster and avoids the need to visit an LHDN office. The e-Stamping certificate has the same legal validity as a physical stamp.

Option 3: Through Your Lawyer or Property Agent

If a lawyer prepared the tenancy agreement, they typically handle the stamping as part of their service. The stamp duty is billed to the client (usually the tenant, unless otherwise agreed). Property agents sometimes facilitate this as well, though the actual stamping is done through LHDN.

Penalties for Late or Non-Stamping

On a tenancy with RM 360 stamp duty:

• Late by 2 months: penalty of RM 50 (10% of RM 360 = RM 36, but minimum is RM 50). Total: RM 410.
• Late by 5 months: penalty of RM 100 (20% of RM 360 = RM 72, but minimum is RM 100). Total: RM 460.

The penalties are not devastating in absolute terms, but they compound with the fundamental problem: an unstamped agreement is inadmissible in court. If a dispute arises while the agreement is unstamped, you must first pay the duty plus penalty before the document becomes admissible. During that window, you have no enforceable legal protection.

Duplicate Copies

Each copy of the tenancy agreement that needs to be stamped incurs additional duty. The standard practice is to stamp two copies — one for the landlord and one for the tenant.

The duty on the principal copy (usually the landlord's copy) is the full stamp duty calculated as above. The duplicate copy (tenant's copy) attracts a nominal fee of RM 10.

So for the Example 2 scenario above (RM 360 stamp duty):

• Principal copy: RM 360
• Duplicate copy: RM 10
• Total: RM 370

Some arrangements call for a third copy (for the property agent or lawyer), which would be another RM 10.

Stamp Duty vs Tenancy Agreement Legal Fees

Do not confuse stamp duty with the legal or preparation fees for the tenancy agreement itself. These are separate costs:

For most residential tenancies in the RM 1,500-3,000/month range, the total setup cost (agreement preparation + stamping) is RM 500-1,000. This is a one-time cost per tenancy term.

Tax Deductibility

For landlords declaring rental income under Section 4(d) of the Income Tax Act 1967:

• Stamp duty on tenancy agreement: Deductible expense if paid by the landlord
• Legal fees for tenancy agreement: Deductible expense
• Agent fees for finding tenant: Deductible expense

On a 2-year tenancy where the landlord pays RM 360 in stamp duty and RM 500 in legal/agent fees, the total deductible amount is RM 860 — spread over 24 months, that is approximately RM 36/month in deductible expenses. For a landlord in the 19% marginal tax bracket, the actual tax saving is RM 163/year.

For more details on what landlords can and cannot deduct from rental income, see our rental income tax guide.

Cashflow Impact: Small Cost, Massive Risk Mitigation

Let us put stamp duty in perspective against the risks it mitigates.

Cost of stamping:

• Typical 1-year tenancy at RM 2,000/month: RM 96 + RM 10 (duplicate) = RM 106
• Amortized: RM 8.83/month

Cost of NOT stamping (if tenant defaults):

• 3 months unpaid rent before eviction: RM 6,000
• Legal fees for eviction proceedings: RM 2,000 - 5,000
• Property damage repair: RM 2,000 - 10,000
• Agreement inadmissible in court — claim may be dismissed

Without a properly stamped agreement, the Strata Management Tribunal and civil courts will not admit it as evidence. You are left arguing without your primary document. Recovery of unpaid rent becomes significantly more difficult, and your legal costs increase because your lawyer must establish the tenancy terms through secondary evidence — if the court allows it at all.

The stamp duty on a tenancy agreement is insurance, not a cost. RM 106 on a 1-year lease at RM 2,000/month protects RM 24,000 in annual rental income. That is a 0.4% insurance premium on the revenue stream it protects. No rational landlord should skip this.

Renewal and New Tenancy Agreements

When a tenancy is renewed, a new tenancy agreement is typically signed — and it must be stamped again. The stamp duty is calculated fresh based on the new rental amount and lease term.

If the tenant continues occupying the property after the lease expires without a new agreement (a "holding over" arrangement), the original stamped agreement may still provide some legal protection — but its enforceability weakens over time and courts may view it as an expired document.

Best practice: Always sign and stamp a new agreement for each tenancy period. The cost is minor, the protection is significant.

For landlords managing multiple properties, the annual stamp duty expense across a portfolio of 3-5 units is RM 250-700/year — fully deductible from rental income. It should be a standard line item in your annual property management budget, not an afterthought.

The Practical Checklist

For every new tenancy:

1. Draft the tenancy agreement (use a lawyer or standardized template)
2. Both parties sign two original copies
3. Stamp the principal copy (full duty) and duplicate copy (RM 10) within 30 days
4. Use STAMPS online (stamps.hasil.gov.my) for fastest processing
5. Store the stamped original securely — this is your legal protection
6. Record the stamp duty as a deductible expense for your annual tax filing

For the stamp duty on your property purchase (a separate and much larger calculation), use our stamp duty calculator. For the full picture of how tenancy-related costs fit into property ownership, see our complete cost breakdown.

Stamp duty on a tenancy agreement is the smallest recurring cost in property investment — smaller than insurance, smaller than assessment tax, often smaller than a single month's utility bill. It is also the most consequential cost to skip. Every other cost in property ownership affects your profitability. This one affects your legal standing. Pay it. Stamp it. Move on to the numbers that actually determine your cashflow.

Sources & Further Reading

• Stamp Act 1949, Item 17(a) — tenancy agreement stamp duty rates
• LHDN e-Duti Setem — online tenancy stamping portal (replaced STAMPS from 1 Jan 2026)
• RDS Law Partners: 2026 Stamp Duty Changes — RM2,400 exemption removal
• PropertyGuru: Tenancy Stamp Duty 2026 — practical stamping guide