Tenancy Agreement Stamp Duty: Rates and Worked Examples

What this tenancy agreement stamp duty guide covers

Tenancy stamp duty is far smaller than transfer stamp duty, but it is often misunderstood. It is not a percentage of the rent. It is calculated in blocks, on the annual rent, after deducting the exempt amount.

How tenancy agreement stamp duty is calculated

The formula has three steps. Take the monthly rent and multiply by twelve to get the annual rent. Deduct the exempt amount. Divide the balance into blocks of RM250, and each block or part of a block is charged at the rate for the lease term.

Worked examples

The table below shows the stamp duty for common monthly rents, by length of the agreement.

Take rent of RM1,500 a month for a one-year term. The annual rent is RM18,000. Deduct the RM2,400 exemption, leaving RM15,600. Divided by RM250 that gives 62.4, rounded up to 63 blocks. At RM1 per block, the stamp duty is RM63.

Why the lease term changes tenancy agreement stamp duty

The rate doubles once the term exceeds one year, and doubles again once it exceeds three years. A three-year tenancy at the same rent carries twice the stamp duty of a one-year agreement. This is worth factoring in when deciding the term, though the amounts remain small relative to other costs.

Duplicate copies

A tenancy agreement is normally stamped in one original, with a duplicate for the other party. The duplicate carries a small nominal duty. Your lawyer will handle the stamping of both.

Costs besides tenancy agreement stamp duty

Stamp duty is not the only cost in a tenancy:

• Legal fees for preparing or reviewing the tenancy agreement
• Rental deposit and utility deposit paid to the landlord
• Agency administrative charges, where an agent is involved
• The cost of stamping the duplicate copy

Why a tenancy agreement should be stamped

An agreement that is not duly stamped may not be admissible in evidence in civil proceedings until the duty and any penalty are paid. For a landlord who may need to enforce the terms, this matters. The cost of stamping is small against the risk of being unable to rely on your own document.

Commercial leases

Commercial leases follow the same calculation principles, but the terms are usually more complex: renewal clauses, scheduled rent increases, maintenance responsibilities, and permitted use of the premises. The legal cost for a commercial lease reflects that more detailed drafting work.

Why an unstamped agreement becomes a problem

An unstamped tenancy agreement is not void, but it cannot be admitted in evidence in court until the duty and the penalty are paid.

That means a landlord who wants to recover rent arrears has to stamp it first, with a penalty, before the case can go forward. That penalty often far exceeds the original duty.

Tenants are affected too. An unstamped agreement makes it harder for a tenant to prove the terms that were agreed when a dispute arises.

What changes the amount of duty

The two main factors are the annual rent after the exemption and the term. A three-year agreement attracts a different rate from a one-year agreement at the same monthly rent.

Duplicate copies attract a small fixed duty, and this is often overlooked when both parties want a stamped copy to keep.

For commercial leases the structure can be more complex because payments beyond the base rent are sometimes involved. Check what counts as rent for duty purposes before calculating.

Frequently asked questions about tenancy agreement stamp duty