Stamp Duty for Rental Agreement in Malaysia: Everything You Need to Know
Renting a property is a common practice in Malaysia, but there are certain legal requirements that renters and landlords should be aware of. One of these requirements is the payment of stamp duty for rental agreements. In this article, we will cover everything you need to know about stamp duty for rental agreement in Malaysia.
What is Stamp Duty?
Stamp duty is a tax on legal documents and agreements required by law. In Malaysia, the Stamp Act 1949 governs the collection of stamp duty. This tax is paid on documents such as tenancy agreements, loan agreements, and sale and purchase agreements.
What is Rental Agreement?
A rental agreement is a contract between a landlord and a tenant that outlines the terms and conditions of the rental agreement. These terms may include the duration of the rental, rental amount, payment schedule, and security deposit.
Do Tenants Need to Pay Stamp Duty for Rental Agreement?
Yes, both tenants and landlords are required to pay stamp duty for rental agreements. According to the Stamp Act 1949, the stamp duty for rental agreements is RM1 for every RM250 of the annual rental. For example, if the annual rental is RM10,000, the stamp duty payable is RM40 (10,000/250 x 1).
Who is Responsible for Paying Stamp Duty for Rental Agreement?
Under Malaysian law, both the tenant and the landlord are responsible for paying stamp duty for rental agreements. However, in most cases, the landlord will request the tenant to bear the cost of the stamp duty.
How to Calculate Stamp Duty for Rental Agreement?
To calculate the stamp duty for rental agreement, you need to know the annual rental and the duration of the rental agreement. As we mentioned earlier, the stamp duty is RM1 for every RM250 of the annual rental. Here`s how you can calculate the stamp duty:
Stamp duty payable = (Annual rental / RM250) x RM1 x Duration of rental agreement (in years)
For example, if the annual rental is RM10,000 and the duration of the rental agreement is two years, the stamp duty payable would be:
Stamp duty payable = (10,000/250) x RM1 x 2 = RM80
How to Pay Stamp Duty for Rental Agreement?
You can pay stamp duty for rental agreements at any Stamp Office or online via the e-stamping portal. The payment can be made in cash, bank draft, or by debit/credit card.
Stamp duty for rental agreement is a legal requirement in Malaysia, and tenants and landlords should be aware of the applicable rate and how to calculate it. By following these guidelines, you can ensure that you comply with the law and avoid any potential penalties. Remember, it`s always better to be safe than sorry!