The biggest one-off cost of buying a home in Malaysia, after the down payment, is usually not the house. It is the stamp duty on two documents, plus the lawyer who prepares them. For a first home priced up to RM500,000, one of those costs disappears entirely. Just above that line, it all comes back.
This guide sets out what the law currently says, from primary sources: the Stamp Act 1949 First Schedule as published by LHDN, the Budget 2026 and Budget 2027 tax measures from the Ministry of Finance, the exemption orders as summarised in Malaysian Bar Circular 128/2026 (16 April 2026), and the Solicitors' Remuneration Order 2023. It is a cost explainer, not advice on whether or what to buy.
The two documents that pay stamp duty
When you buy a property with a loan, two documents are stamped.
- The memorandum of transfer (MOT), which moves ownership to you. The buyer pays. Duty is charged on the price or the market value, whichever is higher: RM1 per RM100 (1%) on the first RM100,000, 2% from RM100,001 to RM500,000, 3% from RM500,001 to RM1 million, and 4% on anything above RM1 million.
- The loan agreement. The borrower pays 0.5% of the loan amount.
So a RM500,000 home costs RM1,000 plus RM8,000, or RM9,000 on the transfer, and a RM450,000 loan costs RM2,250.
The first-home exemption and who gets it
The exemption comes from two gazetted orders, P.U.(A) 53/2021 for the transfer and P.U.(A) 54/2021 for the loan agreement, amended at the end of 2025 by P.U.(A) 448/2025 and 449/2025. Budget 2026 extended them for two years, and Bar Council Circular 128/2026 confirms the current window. To qualify:
- You are a Malaysian citizen, buying alone or with another Malaysian citizen.
- It is one unit of residential property valued at not more than RM500,000.
- The sale and purchase agreement is signed from 1 January 2021 to 31 December 2027.
- You have never owned any residential property, alone or jointly, and that includes a house you inherited or received as a gift.
- The loan comes from a recognised lender such as a licensed bank, an Islamic bank, a development finance institution, an insurer or takaful operator, a co-operative or an employer housing-loan scheme.
- You sign a statutory declaration in LHDN's format.
Two points trip people up. First, the order values the transfer at market value, so a RM495,000 price on a unit the bank values at RM510,000 is a risk worth raising with your lawyer before you sign. Second, the Bar Council has told its members that LHDN's declaration templates exclude SOHO, SOFO, SOVO and serviced apartments, even though the Finance Act 2025 definition of residential property appears to include them. That question was still open with LHDN in the April circular.
The RM500,001 cliff, for agreements signed in 2026
Under the orders in force today there is no taper. At RM500,001 you pay full duty on everything: RM9,003 on the transfer and RM2,250 on a RM450,000 loan, RM11,253 in total that a buyer one ringgit cheaper does not pay. If you are signing a sale and purchase agreement before the end of 2026 and negotiating around RM500,000, this is the number to have in mind.
Budget 2027: partial relief up to RM750,000 (proposed)
Budget 2027, tabled on 9 October 2026, proposes to revise the exemption. Appendix 16 of the Ministry of Finance's tax measures says that for loan agreements and instruments of transfer under sale and purchase agreements executed from 1 January 2027 until 31 December 2030, a Malaysian citizen's first residential home would get:
- Priced up to RM500,000: 100% exemption, as now.
- Priced up to RM750,000: 100% exemption on the first RM500,000 of the price, and 50% exemption on the part above RM500,000, up to RM750,000.
Applied to the transfer duty bands, that works out as follows. These are our calculations, not official figures.
- RM600,000: full duty RM12,000. The RM100,000 above the line carries RM3,000, so you would pay about RM1,500.
- RM700,000: full duty RM15,000; you would pay about RM3,000, a saving of RM12,000.
- RM750,000: full duty RM16,500; you would pay about RM3,750.
- RM750,001: the home is above the cap, so the full RM16,503 applies. The cliff moves up, and gets steeper: about RM12,750 on the transfer alone.
The loan agreement is exempt on the same terms, but the Ministry has not said how a 50% exemption on "home price" maps onto a loan amount, so we have not put a number on it. Three cautions. It is a proposal: it takes effect only once the Finance Bill is passed and new exemption orders are gazetted, which had not happened by 27 October 2026. It turns on the date the sale and purchase agreement is signed, so a home above RM500,000 signed in December 2026 gets nothing. And the appendix does not say whether sub-sale homes are treated differently from new ones; the current orders cover both.
Budget 2027 also proposes to bring back the 100% exemption for revived abandoned housing projects, for rescue contractors and original buyers certified by the Ministry of Housing and Local Government, for instruments executed from 1 January 2027 to 31 December 2030.
Legal fees, which are never exempt
Lawyers' fees for the sale and purchase agreement and the loan agreement are fixed by the Solicitors' Remuneration Order 2023, in force since 15 July 2023. For a sub-sale, Table A charges 1.25% on the first RM500,000 (minimum RM500) and 1% on the next RM7 million, separately for each document. A lawyer may give up to 25% off Table A. For a new home bought from a developer under the Housing Development Act, the sale and purchase fee uses Table B, which is a fraction of Table A: 70% for a property between RM250,000 and RM500,000.
Legal fees also carry 8% service tax, the rate on professional services since 1 March 2024. Stamp duty, registration fees, valuation fees and other disbursements are billed on top.
Worked examples: a sub-sale with a 90% loan
These use Table A with no discount, and exclude valuation, land office and bank charges.
- RM300,000 home, RM270,000 loan. Legal fees RM3,750 + RM3,375 + 8% SST = RM7,695. A first-home buyer pays no stamp duty. Anyone else adds RM5,000 + RM1,350 = RM6,350.
- RM500,000 home, RM450,000 loan. Legal fees RM6,250 + RM5,625 + SST = RM12,825. The exemption saves RM11,250 (RM9,000 + RM2,250).
- RM700,000 home, RM630,000 loan. Not eligible on a 2026 agreement. Stamp duty RM15,000 + RM3,150 = RM18,150, and legal fees RM8,250 + RM7,550 + SST = RM17,064. If the Budget 2027 proposal is enacted, a first-home buyer signing from 1 January 2027 would pay about RM3,000 on the transfer instead of RM15,000.
Add the down payment. Bank Negara only caps the loan at 70% from a borrower's third housing loan, so the familiar 10% down payment on a first home is bank practice rather than a rule. On that basis the cash needed at RM500,000 is about RM62,825 for a first-home buyer and RM74,075 for everyone else.
If you are not a Malaysian citizen
From 1 January 2026, transfers of residential property to non-citizens (other than permanent residents) and foreign companies pay a flat 8%, up from 4%, under the Finance Act 2025. Commercial property stays at 4%. State governments set separate minimum prices for foreign buyers, which are outside this guide.
Related help for first-time buyers
Budget 2026 doubled the Skim Jaminan Kredit Perumahan (SJKP) guarantee to RM20 billion. SJKP's own site says its SJKP-MADANI scheme guarantees loans of up to RM360,000 at up to 120% of the price, covering legal and valuation fees, for citizens whose repayments stay within 65% of gross income.
The 30-day deadline, and what late stamping costs
Stamp duty is not payable whenever you get round to it. An instrument executed in Malaysia must be stamped within 30 days of execution, or within 30 days of first receipt in Malaysia if it was signed abroad. Your lawyer normally handles the submission, but the liability is yours.
Miss it and the penalty scale set by the Finance Act 2024, in force since 1 January 2025, applies:
- Stamped within three months after the 30-day deadline: RM50 or 10% of the duty, whichever is higher.
- Any later than that: RM100 or 20% of the duty, whichever is higher.
On the RM700,000 example above, where the duty is RM18,150, that is RM1,815 if you are slightly late and RM3,630 if you are not. On an exempt first home the percentage lands on nothing, but the flat RM50 or RM100 floor does not, so a nil duty bill is not a reason to let the file sit.
One amnesty is still open. Under LHDN's Stamp Duty Special Voluntary Disclosure Programme, instruments executed between 1 January 2023 and 31 December 2025 that were never stamped get a full, automatic penalty waiver if you apply and pay by 31 December 2026, extended on 26 June 2026 from the original 30 June cut-off. No separate appeal is needed, and an instrument declared this way is not subject to audit. Fraud cases are excluded. If you bought in that window and the transfer is still unstamped because the title had not been issued, this is the window to close it in.
From 1 January 2027, you assess your own duty
LHDN is replacing assessment by the Collector with a Stamp Duty Self-Assessment System (STSDS), delivered through the e-Duti Setem module on MyTax and phased in over three years:
- 1 January 2026 — tenancy and lease agreements, general stamping and securities.
- 1 January 2027 — transfers of real property that do not involve a JPPH valuation, which covers most MOTs. LHDN's own STSDS page words phase 2 this narrowly; transfers that do go to JPPH fall into phase 3.
- 1 January 2028 — all other chargeable instruments.
Anyone signing a sale and purchase agreement now will almost certainly have the transfer stamped in 2027 or later, so this is the regime that will apply to them. Two consequences are worth knowing before you sign.
First, LHDN's transition concession, which waives the penalty for an incorrect return or incorrect information, runs only from 1 January to 31 December 2026, and property transfers are not even in that first phase. Nobody stamping a transfer under self-assessment inherits it.
Second, self-assessment sharpens the market-value point made above. The exemption order is written against market value, not the figure on your agreement, and under sections 72C and 72D of the Stamp Act an incorrect return can draw a penalty of RM200 to RM2,000, while duty undercharged carries a fine of RM1,000 to RM10,000 plus a special penalty of 100% of the shortfall. LHDN's Stamp Duty Audit Framework, in force since 1 January 2025, lets it look back three calendar years as a matter of course, and without any time limit where it suspects fraud, evasion or negligence. Declare the valuation your lawyer and your bank can actually stand behind.
