Stamp Duty on MOT vs Loan Agreement: What's the Difference and How Much Do You Pay?

When you buy a property in Malaysia, stamp duty is not a single charge. Two separate duties apply: one on the instrument that transfers ownership (the Memorandum of Transfer, or MOT) and another on the loan agreement you sign with your bank. Understanding both, including how each is calculated, is essential before you commit to any purchase budget.

What is the MOT and why does it attract stamp duty?

The Memorandum of Transfer (MOT) is the legal document that formally transfers the registered title of a property from seller to buyer. Under the Stamp Act 1949, any instrument that conveys property in Malaysia must be stamped before it is legally valid. LHDN (Lembaga Hasil Dalam Negeri) assesses and collects this duty.

Stamp duty is charged on the higher of the purchase price or the market value as determined by LHDN. If your SPA price is RM550,000 but LHDN’s valuer assesses market value at RM570,000, you pay duty on RM570,000.

What is the loan agreement stamp duty?

When you take a housing loan or Islamic financing to fund your purchase, the loan agreement itself is a separate dutiable instrument. This duty is distinct from the MOT duty and is charged at a flat rate of 0.5% on the total loan amount, regardless of the property price. It applies to all buyer categories: Malaysian citizens, permanent residents, and foreigners alike.

MOT stamp duty rates (Malaysian citizens and PRs, effective 2026)

For Malaysian citizens and permanent residents buying residential or commercial property, a tiered progressive scale applies:

Property Value Tranche	Rate	Duty on Tranche
First RM100,000	1%	Up to RM1,000
RM100,001 to RM500,000	2%	Up to RM8,000
RM500,001 to RM1,000,000	3%	Up to RM15,000
Above RM1,000,000	4%	On the excess

Each tranche is taxed at its own rate, not the total value. A RM700,000 property does not attract 3% on the full amount: only the slice from RM500,001 to RM700,000 is taxed at 3%.

Foreign buyers: flat 8% from 1 January 2026

Following Budget 2026, non-citizen buyers (excluding permanent residents) pay a flat 8% stamp duty on the entire MOT value from 1 January 2026 onwards. This replaced the previous tiered scale that applied to foreigners and significantly raises the cost of Malaysian property for non-resident purchasers.

Worked examples: side-by-side totals

Example 1: RM450,000 home, 90% loan

This is the typical first-home scenario for a Malaysian buyer.

Component	Calculation	Amount
MOT: first RM100,000 @ 1%	RM100,000 x 1%	RM1,000
MOT: next RM350,000 @ 2%	RM350,000 x 2%	RM7,000
Total MOT stamp duty		RM8,000
Loan: RM405,000 @ 0.5%	RM405,000 x 0.5%	RM2,025
Total stamp duty (both)		RM10,025

Example 2: RM750,000 home, 90% loan

Component	Calculation	Amount
MOT: first RM100,000 @ 1%	RM100,000 x 1%	RM1,000
MOT: next RM400,000 @ 2%	RM400,000 x 2%	RM8,000
MOT: next RM250,000 @ 3%	RM250,000 x 3%	RM7,500
Total MOT stamp duty		RM16,500
Loan: RM675,000 @ 0.5%	RM675,000 x 0.5%	RM3,375
Total stamp duty (both)		RM19,875

Example 3: RM1,500,000 home, 80% loan (Malaysian citizen)

Component	Calculation	Amount
MOT: first RM100,000 @ 1%		RM1,000
MOT: next RM400,000 @ 2%		RM8,000
MOT: next RM500,000 @ 3%		RM15,000
MOT: remaining RM500,000 @ 4%		RM20,000
Total MOT stamp duty		RM44,000
Loan: RM1,200,000 @ 0.5%		RM6,000
Total stamp duty (both)		RM50,000

Exemptions that can bring your bill to zero

First-time homebuyer exemption (extended to 31 December 2027)

Under Budget 2026, the Malaysian government extended a 100% stamp duty exemption on both the MOT and the loan agreement for first-time buyers purchasing residential property priced at RM500,000 and below. The Sale and Purchase Agreement (SPA) must be executed on or before 31 December 2027.

Eligibility criteria:

• Malaysian citizen only (not open to PRs or foreigners)
• Must be a genuine first-time residential property owner
• Property price must not exceed RM500,000
• Applies to both the MOT instrument and the loan agreement

On a RM450,000 purchase with a 90% loan, this exemption saves a first-time buyer RM10,025 (RM8,000 MOT + RM2,025 loan duty).

Affordable housing schemes

Purchases under specific government programmes such as PR1MA, RUMAWIP, and State housing schemes may carry partial or full exemptions. Check with LHDN or your solicitor to confirm which instruments qualify under each scheme.

When is stamp duty paid and what happens if you are late?

Both stamp duties must be stamped within 30 days of the instrument being executed in Malaysia (or 30 days after it is received in Malaysia if signed abroad). LHDN enforces late penalties under Section 47A of the Stamp Act 1949:

• Delay up to 3 months: penalty of RM25 or 5% of deficient duty, whichever is higher
• Delay 3 to 6 months: 10% of deficient duty
• Delay more than 6 months: 20% of deficient duty

Stamping is now done electronically through STAMPS (the Stamp Assessment and Payment System) at stamps.hasil.gov.my. Your solicitor typically handles submission on your behalf.

MOT vs loan agreement stamp duty: quick comparison

Feature	MOT Stamp Duty	Loan Agreement Stamp Duty
Based on	Property value (or market value, whichever is higher)	Total loan amount
Rate structure	Tiered progressive (1% to 4%)	Flat 0.5%
Who pays	Buyer	Borrower (buyer)
Foreign buyer rate	Flat 8% from Jan 2026	0.5% (same as citizens)
First-home exemption	Yes, up to RM500k (until Dec 2027)	Yes, same exemption applies
Legal basis	Stamp Act 1949, First Schedule	Stamp Act 1949, First Schedule

What about sub-sale vs primary market properties?

The stamp duty calculation is identical whether you buy directly from a developer (primary market) or from a previous owner (sub-sale). The only practical difference is timing: on a primary market purchase with a master title not yet issued, the MOT is stamped only once the individual strata or land title is issued and transferred. Your solicitor will hold the stamped SPA in the interim.

Key takeaways

• Two stamp duties apply on every property purchase: one on the MOT (transfer) and one on the loan agreement.
• MOT duty uses a tiered scale from 1% to 4%, applied progressively on each tranche of property value for Malaysian citizens and PRs.
• Loan agreement duty is a flat 0.5% on the total loan amount, regardless of property price.
• From 1 January 2026, non-citizen buyers pay a flat 8% on the MOT value instead of the tiered scale.
• First-time Malaysian buyers purchasing a home at RM500,000 or below are fully exempt from both duties until 31 December 2027 under Budget 2026.
• Both duties must be paid within 30 days of signing; late payment attracts penalties of 5% to 20% of the deficient duty.
• LHDN assesses duty on the higher of purchase price or market value, so get a valuation early to avoid surprises.

Frequently asked questions

Can the MOT stamp duty and loan stamp duty be paid together?

Yes. Your solicitor typically files both instruments through the STAMPS e-system at the same time and will collect a single payment from you covering both duties, plus legal fees. Always ask for an itemised breakdown so you can verify each component.

Is stamp duty refundable if my loan is rejected after signing the SPA?

No stamp duty refund is given simply because a loan falls through. Refund claims under the Stamp Act 1949 are limited to specific circumstances such as instruments found void ab initio or transactions that did not complete due to fraud. If a deal falls apart after stamping, consult your solicitor about whether an application under Section 57 of the Act is possible.

Does stamp duty apply to refinancing?

Yes. If you refinance your existing housing loan, stamp duty of 0.5% applies on the new loan agreement amount. However, an exemption exists for refinancing that does not increase the original loan quantum (i.e., you are restructuring without topping up). Confirm the current exemption status with LHDN or your solicitor before refinancing.

What is the difference between stamping the SPA and stamping the MOT?

The SPA (Sale and Purchase Agreement) itself also attracts a nominal fixed duty (typically RM10 per copy). This is separate from, and much lower than, the ad valorem duty on the MOT. The larger cost is always the MOT duty on the property value.

Do I pay stamp duty again when I sell the property?

No. Stamp duty is the buyer’s cost at point of purchase. When you sell, the relevant levy is the Real Property Gains Tax (RPGT) on any capital gain, collected by LHDN. The buyer in any future transaction is the one who pays stamp duty at that time.

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Figures and exemption windows are based on the Stamp Act 1949 (as amended), Budget 2026 announcements, and LHDN guidance current as of June 2026. Tax rules change: verify current rates and exemption eligibility with LHDN or a qualified Malaysian solicitor before signing any instrument.

For a broader picture of buying costs, see our guides on property costs and taxes in Malaysia and legal fees when buying a house in Malaysia.