Property · Stamp duty

Stamp Duty & Legal Fees in Malaysia (2026): The Full Upfront Cost

A complete breakdown of Memorandum of Transfer stamp duty, loan agreement duty, the first-home exemption, the new 8% foreigner rate, and SRO 2023 legal fees — so you know the full cash outlay before you sign.

When you buy a home in Malaysia, the purchase price on the sale and purchase agreement (SPA) is only the start. Before you get the keys you will have already paid stamp duty on the title transfer, stamp duty on the loan agreement, and legal fees to at least two sets of solicitors. Together these can add tens of thousands of ringgit to a transaction. This guide walks through every component — with exact rates, the first-home exemption that can reduce your bill to zero, the new 8% foreigner rate from Budget 2026, and how to add it all up before you commit.

What is stamp duty?

Stamp duty is a government tax collected by the Inland Revenue Board (LHDN) when a legal instrument — such as a property transfer or a loan agreement — is executed. In property transactions there are two separate stamp duty charges you will encounter:

Memorandum of Transfer (MOT) stamp duty — also called ad valorem transfer duty — assessed on the property's market value or purchase price, whichever is higher.
Loan / financing agreement stamp duty — assessed on the loan amount, not the property value.

Both must be stamped within 30 days of the instrument being executed, and unstamped documents are inadmissible as evidence in court.

MOT stamp duty — the tiered scale for citizens and PRs

For Malaysian citizens and permanent residents buying residential or commercial property, MOT stamp duty is calculated on a tiered (ad valorem) scale:

First RM100,000: 1%
RM100,001 – RM500,000: 2%
RM500,001 – RM1,000,000: 3%
Above RM1,000,000: 4%

Each tier applies only to the slice of value that falls within it — not to the whole price. A RM480,000 home therefore attracts 1% on the first RM100,000 (RM1,000) plus 2% on the remaining RM380,000 (RM7,600), totalling RM8,600 MOT duty.

For a RM1,200,000 property — spanning all four tiers — the calculation is:

1% on RM100,000: RM 1,000
2% on RM400,000: RM 8,000
3% on RM500,000: RM 15,000
4% on RM200,000: RM 8,000
Total MOT duty: RM 32,000

Foreigner rate — 8% flat from 1 January 2026

Non-citizens who are not permanent residents, and foreign companies, face a flat 8% MOT stamp duty on the full property value, effective 1 January 2026 under Budget 2026. This replaced the previous 4% flat rate. The tiered citizen/PR scale does not apply to this group. On a RM600,000 property, a foreign buyer pays RM48,000 in MOT duty alone.

Permanent residents (PR holders) are treated the same as citizens and use the tiered scale above, not the 8% flat rate. Only non-PR non-citizens and foreign entities pay the 8% rate.

Loan agreement stamp duty — 0.5% flat

The financing agreement between you and your bank is stamped separately at a flat 0.5% of the loan amount. This applies to both conventional bank loans and Islamic financing facilities. On a RM432,000 loan the charge is RM432,000 × 0.5% = RM2,160.

For a cash purchase with no financing, there is no loan agreement and therefore no loan duty — only MOT duty applies.

The first-home exemption

Malaysian citizens buying their first residential property — meaning they have never owned any residential property in Malaysia before — qualify for a 100% stamp duty exemption on both the MOT duty and the loan agreement duty, subject to these conditions:

The property value must not exceed RM500,000.
The SPA must be executed (signed) by 31 December 2027 — this deadline was extended under Budget 2026 (it was previously 31 December 2025).
The buyer must be a Malaysian citizen (permanent residents do not qualify for this specific exemption).
The property must be residential — commercial properties and commercial titles are excluded.

Returning to the RM480,000 example: a citizen buying their first home at this price saves the full RM8,600 MOT duty and the full RM2,160 loan duty, bringing their combined stamp duty bill to RM0. The exemption is all-or-nothing based on the RM500,000 ceiling — a RM501,000 property gets no exemption at all.

The exemption applies only to the residential portion of a mixed-title property. If your unit carries a commercial title (common in some SoHo/SOFO developments), confirm the title category with your solicitor before assuming you qualify.

Worked example: RM480,000 purchase, RM432,000 loan

Property price: RM 480,000
Loan amount (90%): RM 432,000
MOT duty (1%×100k + 2%×380k): RM 8,600
Loan agreement duty (0.5%×432k): RM 2,160
Total stamp duty: RM 10,760
If first home (citizen, ≤RM500k): RM 0

Legal and conveyancing fees — SRO 2023

Beyond stamp duty, you pay solicitors' fees for conveyancing. Under the Solicitors' Remuneration Order 2023 (SRO 2023), the fee scale is:

First RM500,000 of transaction value: 1.25%
RM500,001 – RM7,500,000: 1%
Above RM7,500,000: Negotiable (capped)
Minimum fee: RM 500

Two separate sets of fees apply to a typical financed purchase: one for the sale and purchase (S&P) transaction and one for the loan / charge documentation. On the RM480,000 example:

S&P legal fee (1.25% × RM480,000): RM 6,000
Loan legal fee (1.25% × RM432,000): RM 5,400
Total legal fees (before SST): RM 11,400

An 8% Service Tax (SST) applies on top of the legal fees, increasing the total further. Buying from a licensed housing developer (primary market) may attract discounts on the legal fees — confirm with your solicitor.

The SRO 2023 scale is the maximum chargeable. Solicitors cannot charge above it, but they may offer a discount, particularly for developer-appointed panel law firms. Always ask for a fee estimate letter before engaging.

Putting it all together: the total upfront cash

For a RM480,000 home with a 90% loan, a Malaysian citizen who is not buying their first home faces roughly:

Down payment (10%): RM 48,000
MOT stamp duty: RM 8,600
Loan stamp duty: RM 2,160
Legal fees (before SST): RM 11,400
SST on legal fees (8%): ≈ RM 912
Total cash required (approx.): ≈ RM 71,072

A first-time buyer of the same property eliminates the RM10,760 stamp duty, reducing the non-down-payment cash outlay from about RM23,000 to around RM12,300 (legal fees + SST). That is a material saving — particularly for buyers stretching to the RM500,000 ceiling.

Common questions

Does stamp duty apply to subsale (secondary market) properties? Yes. MOT duty and loan duty apply regardless of whether you are buying from a developer or a private seller. The rates and exemptions are the same.
What about RPGT (Real Property Gains Tax)? RPGT is a separate charge on the seller, not the buyer, and is not included in the upfront cost calculation here.
Can I deduct stamp duty from income tax? No. Stamp duty on residential purchases is not a deductible expense for Malaysian resident personal income tax.
Is stamp duty the same for commercial property? The MOT scale is the same, but the first-home exemption does not apply to commercial titles. Loan duty at 0.5% applies as usual.

Calculate your own figures

Every property transaction is different. Use the Stamp Duty Calculator to enter your exact purchase price and loan amount — it applies the tiered scale, checks first-home eligibility, and shows the SRO 2023 legal fees in seconds. If you are also deciding how much to borrow, the home-loan prepayment guide shows how an extra payment each month can materially cut your total interest over the life of the mortgage.

All figures are estimates for educational use only and do not constitute legal or financial advice. Stamp duty rates, exemptions, and fee scales may change. Verify current figures with LHDN and your solicitor before executing any transaction.

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