Stamp Duty Lease Agreement Malaysia: All You Need to Know
If you are planning to lease a property in Malaysia, you would be required to pay a stamp duty. Stamp duty is a tax imposed by the government on legal documents, including lease agreements, to make them legally valid. In Malaysia, the stamp duty on a lease agreement is governed by the Stamp Duty Act 1949 and the Stamp Duty (Remission) Order 2018.
What is Stamp Duty?
Stamp duty is a tax that is imposed on legal documents to ensure their legal validity. It is a form of indirect tax that is levied on various kinds of legal documents, including lease agreements, property sale agreements, employment contracts, etc. The amount of stamp duty payable depends on the value of the property and the term of the lease agreement.
Stamp Duty on Lease Agreement in Malaysia
In Malaysia, the stamp duty payable on a lease agreement depends on the duration of the lease. The following are the stamp duty rates for lease agreements in Malaysia:
– For a lease agreement with a term of less than 1 year: RM1 for every RM250 of the annual rent payable.
– For a lease agreement with a term of 1 year or more but less than 3 years: RM2 for every RM250 of the annual rent payable.
– For a lease agreement with a term of 3 years or more but less than 5 years: RM3 for every RM250 of the annual rent payable.
– For a lease agreement with a term of 5 years or more: RM4 for every RM250 of the annual rent payable.
For example, if the annual rent payable is RM30,000 for a lease agreement with a term of 2 years, the stamp duty payable would be RM480 (RM2 x 120).
Stamp Duty Exemption
The Malaysian government has provided certain exemptions for stamp duty on lease agreements, subject to certain conditions. The exemptions are as follows:
– Lease agreements for residential properties with a monthly rental of RM2,500 or less are exempted from stamp duty.
– Lease agreements for commercial properties with a monthly rental of RM1,000 or less are exempted from stamp duty.
How to Pay Stamp Duty?
Stamp duty can be paid at any of the Stamp Duty Office branches or online through the Malaysian Inland Revenue Board`s e-stamping system. The stamp duty must be paid within 30 days from the date of the lease agreement.
In conclusion, lease agreements in Malaysia are subject to stamp duty, and the amount payable depends on the duration of the lease. However, the government has provided exemptions for residential and commercial properties subject to certain conditions. You can pay the stamp duty at any of the Stamp Duty Office branches or through the e-stamping system. Ensure that you pay the stamp duty within 30 days from the date of the lease agreement to avoid penalties.