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Malaysia Stamp Duty
Malaysia Stamp Duty Explained
Stamp duty will be part of the equation when there is a real estate transaction in Malaysia. This applies whether you want to transfer or purchase the asset in question.
The fee that is applied on all legal documents pertaining to your loan agreement is called stamp duty. This fee is also applied when you make a purchase on a property, like a house, for example.
In Malaysia, stamp duties are divided into two categories. The first is Fixed Duties, and the second is Ad Valorem Duties. Fixed Duties is where you will have to pay a fixed price that includes any stamps for policies or copies of those policies.
Ad Valorem Duties are variable costs. These costs will depend on the value of the transaction. Costs will include loan agreements, the value of the property transfer, and any taxes involved.
How Much Stamp Duty Is Charged in Malaysia?
Fixed tier duties are charged in the following rates:
- 1% – On the first RM100,000 of the price of the property
- 2% – Between RM100,001 and RM500,000
- 3% – Between RM500,001 to RM1 million
- 4% – Anything that is above RM1 million
Remember that stamp duty will also affect any loan agreement of the property in question. This is because loan agreements are considered legal documents too. For loan agreements, the duty imposed will be a flat rate of 0.5%. This percentage is applied to the loan’s full value.
The 2021 Malaysia Stamp Duty Exemption
New home and property owners had some good news in 2021. First-time homebuyers are exempted from stamp duties, as announced by the Government. A full exemption can be applicable if the property is under RM500,000 in value.
To be eligible for the exemption, you need to meet the following conditions:
- Your Sale and Purchase Agreement must be made between 1 January 2021 and 31 December 2025.
- You must be a Malaysian citizen.
- You must not have owned any property previously.
- Your property must only be residential. This excludes service residents, SOVO, SOHO or SOFO type of accommodation.
Are Shares Impacted As Well?
Yes, if you own shares in Malaysia, you will also be subject to stamp duty. The tax is applicable for stocks, non-listed shares, or marketable securities.
The valuation method used for unlisted ordinary shares boils down to two factors. The first factor is sale consideration and the second is net tangible assets. RM3 duty fees are applicable for every RM1,000 or any fraction thereof. This is based on either the value or consideration, depending on which one is greater.
For shares and stocks that are listed on Malaysia’s stock exchange, Bursa Malaysia, there are stamp duty fees imposed too. The stamp duties are RM1.50 for every RM1,000, or any fraction thereof is applicable. This is based on either the value or consideration, depending on which one is greater.
Need Help With Malaysia Accounting and Taxation?
Our experts at 3E Accounting are well-versed in all matters related to accounting and taxation. If you need guidance, our friendly consultants are here to assist. Reach out to us anytime, and we’ll get back to you as soon as possible.