Stamp Duty Charges for Tenancy Agreement

As a tenant or a landlord, it is crucial to understand the stamp duty charges that come with a tenancy agreement. Stamp duty is a tax that is levied on legal documents and transactions by the government. In Malaysia, the Inland Revenue Board (LHDN) is the governing body that is responsible for stamp duty.

When it comes to tenancy agreements, both the tenant and the landlord are responsible for paying the stamp duty charges. The amount of stamp duty that is payable depends on the agreed-upon rental amount and the duration of the tenancy agreement.

For a tenancy agreement with a rental amount of up to RM 2,500 per month, the stamp duty payable is RM 1 for every RM 250 or part of it, for the first three years of the tenancy agreement. For example, if the rental amount is RM 1,800 per month and the tenancy agreement is for two years, the stamp duty payable would be RM 14.40 (RM 1 x 58).

For a tenancy agreement with a rental amount of more than RM 2,500 per month, the stamp duty payable is calculated based on a tiered system. The stamp duty for the first RM 2,500 of the monthly rental amount is charged at a rate of RM 1 for every RM 250 or part of it, while the stamp duty for the remaining monthly rental amount is charged at a rate of RM 2 for every RM 250 or part of it. The stamp duty payable is capped at a maximum of RM 2,400 for tenancy agreements that are up to three years long.

For a tenancy agreement that is more than three years long, the stamp duty payable is calculated based on the total rental amount for the entire duration of the tenancy agreement. The stamp duty payable is charged at a rate of RM 1 for every RM 250 or part of it, up to a maximum of RM 2,400.

It is important to note that stamp duty charges for tenancy agreements are applicable to both residential and commercial properties. Failure to pay the stamp duty charges can result in penalties, fines, and legal action.

In conclusion, understanding the stamp duty charges for tenancy agreements is crucial for both tenants and landlords. It is important to factor in these charges when negotiating the rental amount and duration of the tenancy agreement. By being aware of these charges and ensuring they are paid on time, both parties can avoid legal repercussions and ensure a smooth tenancy experience.