When buying a house in Malaysia, the price tag you see on the listing isn't the final amount you’ll pay. One of the significant "hidden" costs is Stamp Duty. It is a tax levied on legal documents, most notably the Memorandum of Transfer (MOT) and the Loan Agreement.
Understanding how to calculate this can help you prepare your finances better and avoid last-minute shocks.
What is Stamp Duty?
Stamp Duty is a transactional tax that applies to documents involving the transfer of property or loan agreements. There are two main types you need to pay:
- Stamp Duty on Memorandum of Transfer (MOT) – Based on the property price.
- Stamp Duty on Loan Agreement – Based on the loan amount.
1. Stamp Duty on Memorandum of Transfer (MOT)
This is calculated based on a tiered system. As the property price increases, the rate increases for that portion of the price.
| Property Price Tiers | Stamp Duty Rate |
|---|---|
| First RM100,000 | 1% |
| Next RM400,000 (RM101k - RM500k) | 2% |
| Next RM2,500,000 (RM501k - RM3m) | 3% |
| Excess of RM3,000,000 and above | 4% |
Calculation Example
Scenario: You buy a condo in Petaling Jaya for RM700,000.
- First RM100k: 1% x RM100,000 = RM1,000
- Next RM400k: 2% x RM400,000 = RM8,000
- Remaining RM200k: 3% x RM200,000 = RM6,000
- Total MOT Stamp Duty: RM1,000 + RM8,000 + RM6,000 = RM15,000
2. Stamp Duty on Loan Agreement
This is much simpler. It is a flat rate of 0.5% of the total loan amount.
Calculation Example
Scenario: You take a 90% loan for the RM700,000 property (Loan amount = RM630,000).
- Loan Stamp Duty: 0.5% x RM630,000 = RM3,150
Exemptions for First-Time Home Buyers (i-Miliki)
The Malaysian government often provides incentives for first-time buyers. Under the i-Miliki initiative (subject to current budget announcements, always verity with a lawyer):
- Properties under RM500,000: 100% Stamp Duty Exemption on both MOT and Loan Agreement.
- Properties between RM500,001 to RM1,000,000: 75% Stamp Duty Exemption (valid until end of 2023, check for 2024/2025 updates).
When Do You Pay?
The Stamp Duty for the Loan Agreement is paid before the loan is disbursed. The MOT Stamp Duty is usually paid upon the adjudication of the transfer document, which happens closer to the completion of the sale transfer.
Conclusion
Stamp duty is a substantial cost. For a RM700k property, it can add up to over RM18,000 (MOT + Loan). Always factor this into your initial budget alongside your down payment and legal fees.
