Stamp Duty Exemption for First-Time Buyers in Malaysia: What's Actually Covered

If you are a Malaysian citizen buying your first home and the price is RM500,000 or below, you pay zero stamp duty on both the property transfer and your loan agreement. That one exemption can save you up to RM11,000 in upfront costs, and under Budget 2026, it applies to Sale and Purchase Agreements (SPAs) signed up to 31 December 2027.

This guide explains exactly what is covered, what is not, who qualifies, and how the savings are applied when your lawyer submits documents to LHDN.

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The two stamp duties that apply to every property purchase

Before understanding the exemption, it helps to know what stamp duty you would normally pay without it. When you buy a home with a bank loan, LHDN stamps two separate legal instruments:

1. The Memorandum of Transfer (MOT): the document that transfers legal ownership from the seller to you. Stamp duty is charged as a percentage of the purchase price.
2. The loan or financing facility agreement: the contract between you and your bank. Stamp duty is a flat rate on the loan amount.

Both charges are your responsibility as the buyer and borrower. You cannot opt out, delay, or negotiate them with LHDN. They are collected through LHDN’s STAMPS e-stamping portal, typically handled by your conveyancing lawyer.

Standard MOT stamp duty rates (Malaysian citizens, 2025-2026)

Purchase price band	Rate
First RM100,000	1%
RM100,001 to RM500,000	2%
RM500,001 to RM1,000,000	3%
Above RM1,000,000	4%

Source: LHDN, Schedule 1, Stamp Act 1949 (as amended). Rates are cumulative, applied band by band.

For a RM500,000 property, the MOT stamp duty without any exemption would be:

• RM100,000 x 1% = RM1,000
• RM400,000 x 2% = RM8,000
• Total: RM9,000

Loan agreement stamp duty (all buyers)

The stamp duty on your housing loan is a flat 0.5% of the loan amount, regardless of size. On a 90% loan for a RM500,000 property (RM450,000 loan), that is RM2,250.

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What the first-time buyer exemption actually covers

The exemption is a full 100% waiver on both instruments, applied at the time of STAMPS submission. There is no partial rebate or deferred refund. You simply pay nothing on both the MOT and the loan agreement.

Property price	MOT duty without exemption	Loan duty without exemption (90% financing)	Total saved
RM200,000	RM3,000	RM900	RM3,900
RM300,000	RM5,000	RM1,350	RM6,350
RM400,000	RM7,000	RM1,800	RM8,800
RM500,000	RM9,000	RM2,250	RM11,250

The exemption does not cover legal fees charged by your lawyer. Those are governed separately by the Solicitors’ Remuneration Order 2023. For a full breakdown of legal fees and other upfront costs, see the total cost of buying property in Malaysia.

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Who qualifies: the eligibility criteria

The exemption is defined in the Stamp Duty (Exemption) (No. 4) Order 2019 and its subsequent extensions, most recently extended via Budget 2026 (Ministry of Finance, October 2025).

You must meet all of the following

• Malaysian citizen: permanent residents, foreigners, and companies do not qualify. Foreign buyers are in fact subject to a flat 8% MOT stamp duty from 1 January 2026 under the Finance Act 2025.
• First-time owner: you have never owned any residential property anywhere in Malaysia. This includes property received as a gift, inherited property, or property held as a joint owner, even if the share was small.
• Residential property only: the exemption applies to residential homes. Commercial lots, shop-offices, serviced apartments zoned for commercial use, and industrial properties are excluded. If in doubt, check the property’s strata or land title category.
• Purchase price at RM500,000 and below: the exemption ceiling is RM500,000. A property priced at RM500,001 receives no exemption at all. There is no partial exemption for the first RM500,000 of a higher-priced property.
• SPA signed between 1 January 2026 and 31 December 2027: the current exemption window under the Budget 2026 extension. The SPA date, not the loan drawdown date or the transfer date, determines eligibility.

Joint purchases

If two people buy together, all named buyers must individually meet the first-time buyer criteria. If your co-buyer previously owned any residential property, the entire transaction loses the exemption. This is a common pitfall for couples where one partner inherited a family home years earlier.

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The Budget 2026 extension: what changed

The first-time buyer stamp duty exemption has been extended multiple times since it was introduced. The current iteration, confirmed in the October 2025 Budget 2026 speech by the Ministry of Finance, extends it by two years to 31 December 2027. The price ceiling of RM500,000 and the 100% waiver rate remain unchanged from the previous period.

An earlier extended scheme that offered a 75% exemption for properties priced between RM500,001 and RM1,000,000 expired on 31 December 2023 and was not renewed. As of 2026, there is no partial exemption available for properties between RM500,001 and RM1,000,000.

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How to claim the exemption

You do not file a separate application form with LHDN. The exemption is applied automatically during the STAMPS e-stamping process, provided your lawyer submits the correct instrument type and your eligibility is declared.

Here is what typically happens:

1. Statutory declaration: you sign a statutory declaration confirming you have never owned any residential property in Malaysia. Your lawyer prepares this as part of the conveyancing package.
2. STAMPS submission: your lawyer uploads the MOT and loan agreement to LHDN’s STAMPS portal, flagging the transaction as an exempt first-time buyer purchase.
3. LHDN assessment: LHDN verifies the property type, price, and your declared status. If the criteria are met, the stamp certificate is issued at RM0 duty for both instruments.
4. Post-completion audit risk: LHDN retains the right to audit exemption claims. If it later emerges that you owned a residential property at the time of purchase (for example, an inherited property that was not declared), LHDN can clawback the full unpaid duty plus penalties.

What you should verify before signing

Before committing to your SPA, do a thorough check of your own property ownership history:

• Search your name at the relevant Land Registry (Pejabat Tanah dan Galian) in any state where you may have acquired property through inheritance or gift.
• If you are a joint buyer, ask your co-buyer to do the same.
• Confirm with your lawyer that the property’s title category qualifies as residential under the Stamp Act.

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Properties that are commonly misunderstood

Serviced apartments: units under a commercial-use strata title do not qualify for the residential exemption even if they function like homes. Check the Pelan Petak for the land category before signing.

Auction properties (lelong): treated the same as direct purchases. The exemption applies if the auction price is at or below RM500,000 and you meet all criteria.

Refinancing: the exemption covers original purchase financing only. Refinancing the same property later attracts 0.5% loan stamp duty with no waiver.

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Key takeaways

• First-time buyers of residential property at RM500,000 and below pay zero stamp duty on both the MOT and the loan agreement.
• The exemption is active for SPAs signed between 1 January 2026 and 31 December 2027 under the Budget 2026 extension.
• Maximum saving is approximately RM11,250 on a RM500,000 property with 90% financing.
• All co-buyers must individually qualify. One co-buyer who previously owned property disqualifies the whole transaction.
• Commercial-use strata titles do not qualify, even when marketed as residential apartments.
• The exemption is applied automatically through LHDN STAMPS via your lawyer, not as a separate refund claim.
• Properties above RM500,000 receive no partial exemption since the RM500,001 to RM1,000,000 partial waiver expired in December 2023 and was not renewed.

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Frequently asked questions

I signed my SPA in late 2025. Does the Budget 2026 extension apply to me?

The extension announced in Budget 2026 covers SPAs signed from 1 January 2026 to 31 December 2027. If your SPA was signed before 1 January 2026, your eligibility depends on the previous exemption order in force at the time of your SPA. Speak to your lawyer about which order applies to your specific SPA date.

Does the exemption cover the full loan amount or just the stamp duty on the first RM500,000?

The exemption covers 100% of the loan agreement stamp duty, regardless of the loan size, as long as the property price is at or below RM500,000. If you borrow RM450,000 to fund a RM500,000 property, the entire RM2,250 in loan stamp duty (0.5% x RM450,000) is waived.

I inherited a kampung house from my late parents but never bought a home. Do I qualify?

No. Inherited residential property counts as ownership for the purposes of the exemption. You are not a first-time residential property owner and the exemption does not apply. This rule applies even if you were a minor at the time of inheritance or if the property has since been sold.

Can I claim the exemption on a property purchased under a company name?

No. The exemption applies only to Malaysian citizens buying in their personal capacity. Purchases through a Sdn Bhd, LLP, or any other legal entity do not qualify, and companies are not Malaysian citizens.

My property is priced at RM498,000. I am buying with my spouse, who has never owned property. Are we both exempt?

Yes, provided both of you are Malaysian citizens and neither has ever owned residential property in Malaysia. Both sign the statutory declaration. Your saving is approximately RM10,890: RM9,000 in MOT duty and RM1,890 on a 90% loan of RM448,200.

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For a full picture of all upfront costs when buying your first home, including legal fees, valuation fees, and the deposit structure, see how much it really costs to buy property in Malaysia. For government schemes that help first-time buyers access financing, see first-home schemes in Malaysia.