Stamp Duty on Lease and Tenancy: A Guide to Stamping

Introduction

When you sign a tenancy agreement — whether for a house, office, factory, shop lot or vacant land — the instrument usually needs to be stamped. Stamp duty is a tax on instruments, and it is different from income tax.

This article explains when stamp duty applies to lease/tenancy instruments, how stamping is done, and the documents involved.

Lease/tenancy instruments and ad valorem duty

Instruments that create an interest in property — including statutory tenancies and leases — are subject to ad valorem duty. The duty rates are set out in the First Schedule of the Stamp Act 1949.

The scope of instruments involved includes agreements (and novations) for the lease or tenancy of immovable property: houses, offices, factories, shop lots and vacant land.

In other words, we know of the existence of ad valorem duty on lease/tenancy instruments and that the rates come from the First Schedule of the Stamp Act

1. But the specific numerical rates are not included in this article because they have not been confirmed directly from the official gazette at this review.

How to stamp: STSDS and e-Stamp Duty

Stamping can be done through the Stamp Duty Self-Assessment System (STSDS). The general flow:

1. fill in the Stamp Duty Declaration Form (BNDS) Lease/Tenancy;
2. self-assess the duty payable;
3. pay (via FPX/VA/IB);
4. the stamp certificate is generated;
5. print the certificate.

An instrument is duly stamped when the correct duty is paid and the stamp certificate is attached/affixed to the instrument.

Records: keep for up to 7 years

Official HASiL advice: keep stamping records for up to 7 years from the date the duty was paid. This helps if there is a check or query later.

Stamp duty exemptions

In the stamp duty system, exemption orders exist. A verified example: P.U.(A) 470/2024 (Stamp Duty (Exemption) (No. 9) Order 2024) which exempts instruments of loan or financing agreements under micro-financing schemes up to RM100,000, effective 1 January 2025.

If an instrument is not stamped, there may be penalties or interest under the Stamp Act 1949 — but the specific provisions have not been confirmed at this review, so they are not stated here.

Stamp duty vs income tax

Do not mix up two different systems:

• Stamp duty — a tax on instruments, under the Stamp Act 1949.
• Income tax — a tax on income, under the Income Tax Act 1967.

For example, rental income is reported in your income tax, while the tenancy agreement is stamped separately. They are different.

Frequently Asked Questions (FAQ)

Q. Does a house tenancy agreement need to be stamped? A. Instruments for the lease/tenancy of immovable property (including houses) fall within the instruments subject to ad valorem duty under the First Schedule of the Stamp Act 1949.

Q. What is the stamp duty rate for a tenancy? A. The rates are set out in the First Schedule of the Stamp Act 1949. The specific numerical rates for leases/tenancies have not been confirmed at this review — this item still awaits official confirmation from HASiL — check again with HASiL before deciding. — so they are not stated here.

Q. How do I stamp a tenancy agreement? A. Through the Stamp Duty Self-Assessment System (STSDS): fill in the Stamp Duty Declaration Form (BNDS) Lease/Tenancy, self-assess, pay, and print the stamp certificate.

Q. How long must I keep stamping records? A. Official HASiL advice: keep stamping records for up to 7 years from the date the duty was paid.

Q. Are there stamp duty exemptions? A. Yes — exemption orders exist, for example P.U.(A) 470/2024 for micro- financing instruments ≤ RM100,000 (effective 1 January 2025). Check the relevant order for your situation.

Glossary

• Stamp duty — a tax on instruments under the Stamp Act 1949.
• Ad valorem duty — duty calculated based on the value of the instrument.
• STSDS — Stamp Duty Self-Assessment System (Sistem Taksir Sendiri Duti Setem).
• BNDS — Stamp Duty Declaration Form (Borang Nyata Duti Setem) (Lease/Tenancy).
• Instrument — a written document that creates a right or interest.
• HASiL — Lembaga Hasil Dalam Negeri Malaysia (Inland Revenue Board of Malaysia).