Stamp Duty and Legal Fees When Buying Property in Malaysia
Edited by Teh Kim Guan, ACMA, CGMA · Updated 2026-06-24
Stamp duty and legal fees are the two largest government-mandated costs beyond the property price itself, and they are calculated very differently from each other. Understanding the tiers and scales before you sign anything will tell you exactly how much cash to set aside, and whether you qualify for an exemption that could save you thousands.
This guide explains the mechanics of every charge, with worked calculations and a total upfront cost table. For a broader overview of all property transaction costs, see the full cost of buying property in Malaysia.
What is stamp duty and why does it apply twice?
When you buy property with a bank loan in Malaysia, LHDN (Lembaga Hasil Dalam Negeri) applies stamp duty on two separate legal instruments:
- The Memorandum of Transfer (MOT): the document that formally transfers ownership from seller to buyer.
- The loan agreement (or facility agreement): the contract between you and the bank.
Each instrument is stamped and assessed independently. The MOT uses a tiered ad-valorem rate based on the purchase price. The loan agreement uses a flat rate based on the loan amount. Both must be stamped within 30 days of execution or penalties apply (source: LHDN, Stamp Act 1949).
MOT stamp duty: how the tiers work
The Memorandum of Transfer stamp duty is calculated on the higher of the purchase price or the market value assessed by LHDN. For most straightforward residential purchases, these two figures are the same.
Standard rates (Malaysian citizens and permanent residents, 2025-2026)
| Purchase price band | Rate | Maximum duty in this band |
|---|---|---|
| First RM100,000 | 1% | RM1,000 |
| RM100,001 to RM500,000 | 2% | RM8,000 |
| RM500,001 to RM1,000,000 | 3% | RM15,000 |
| Above RM1,000,000 | 4% | Uncapped |
Source: LHDN, Schedule 1, Stamp Act 1949 (as amended).
The rates are cumulative, not flat. Each band only applies to the portion of the price within that band.
Worked calculation: RM650,000 property
| Band | Amount in band | Rate | Duty |
|---|---|---|---|
| First RM100,000 | RM100,000 | 1% | RM1,000 |
| RM100k to RM500k | RM400,000 | 2% | RM8,000 |
| RM500k to RM650k | RM150,000 | 3% | RM4,500 |
| Total MOT stamp duty | RM13,500 |
Worked calculation: RM1,200,000 property
| Band | Amount in band | Rate | Duty |
|---|---|---|---|
| First RM100,000 | RM100,000 | 1% | RM1,000 |
| RM100k to RM500k | RM400,000 | 2% | RM8,000 |
| RM500k to RM1,000k | RM500,000 | 3% | RM15,000 |
| Above RM1,000k | RM200,000 | 4% | RM8,000 |
| Total MOT stamp duty | RM32,000 |
Foreign buyers: flat 8% from 1 January 2026
Under the Finance Act 2025, non-citizens and non-permanent residents buying residential property in Malaysia pay a flat 8% stamp duty on the full purchase price, effective from 1 January 2026. The same RM1,200,000 property above would attract RM96,000 in MOT stamp duty for a foreign buyer, versus RM32,000 for a Malaysian citizen.
Loan agreement stamp duty: one flat rate
The stamp duty on the bank loan agreement (or Islamic financing facility agreement) is simpler: a flat 0.5% of the total loan amount, regardless of how large the loan is (source: LHDN, Stamp Act 1949, Schedule 1, Item 27).
Examples
| Loan amount | Stamp duty (0.5%) |
|---|---|
| RM250,000 | RM1,250 |
| RM400,000 | RM2,000 |
| RM640,000 (80% of RM800k) | RM3,200 |
| RM900,000 (90% of RM1m) | RM4,500 |
There are no tiers, no caps, and no exemptions beyond the first-time buyer scheme described below. Islamic financing (murabahah, musharakah, etc.) is treated the same as conventional loans for stamp duty purposes.
First-time buyer exemption (until 31 December 2027)
Malaysian citizens purchasing their first residential property priced at RM500,000 and below receive a full exemption on both MOT stamp duty and loan agreement stamp duty, provided the Sale and Purchase Agreement is executed between 1 January 2026 and 31 December 2027 (Budget 2026 extension, confirmed by Ministry of Finance).
Eligibility checklist
- Malaysian citizen (not permanent resident, not foreigner)
- Have never owned any residential property in Malaysia, including through gifts or co-ownership
- The property is residential (not commercial, not mixed-use)
- Purchase price does not exceed RM500,000
- SPA signed within the exemption window
If you co-own the property, all buyers on the title must individually meet the first-time buyer criteria. If one co-buyer previously owned a property, the exemption is lost for the entire transaction.
The saving on a RM500,000 property is significant: RM9,000 in MOT stamp duty and RM2,000 in loan stamp duty (assuming 90% financing), totalling RM11,000 saved.
Legal fees: the SRO 2023 scale explained
All property lawyers in Malaysia must charge within the limits of the Solicitors’ Remuneration Order 2023 (SRO 2023), gazetted on 4 July 2023 and effective 15 July 2023, which replaced the 2005 order.
Legal fees apply to three documents:
- The SPA (Sale and Purchase Agreement): based on the purchase price
- The loan agreement: based on the loan amount
- The MOT (Memorandum of Transfer): based on the purchase price
Table A: standard scale (non-developer transactions)
| Value band | Fee rate | Minimum |
|---|---|---|
| First RM500,000 | 1.25% | RM500 |
| RM500,001 to RM7,500,000 | 1.00% | |
| Above RM7,500,000 | Negotiable (max 1%) |
6% Service Tax (SST) is charged on top of all professional fees. Lawyers may offer a voluntary discount of up to 25% on the prescribed fee, but no more.
Table B: Housing Development Act (HDA) discounts
For properties sold under a licensed housing developer governed by the Housing Development (Control and Licensing) Act 1966, the legal fee on the SPA is automatically discounted:
| Property price | Legal fee (SPA only) |
|---|---|
| RM50,000 and below | RM500 flat |
| RM50,001 to RM250,000 | 75% of Table A |
| RM250,001 to RM500,000 | 70% of Table A |
| RM500,001 to RM1,000,000 | 65% of Table A |
| Above RM1,000,000 | 60% of Table A |
The HDA discount applies to the SPA fee only; loan agreement fees remain at Table A. In practice, many developers also absorb the SPA legal fee entirely as a sales incentive, particularly in competitive markets. If the developer pays the SPA legal fee, you only pay the loan agreement fee and MOT fee.
Worked legal fee example: RM700,000 property, 90% loan (RM630,000)
| Document | Base amount | Calculation | Base fee |
|---|---|---|---|
| SPA (Table A) | RM700,000 | (RM500k x 1.25%) + (RM200k x 1.00%) | RM8,250 |
| Loan agreement | RM630,000 | (RM500k x 1.25%) + (RM130k x 1.00%) | RM7,550 |
| MOT | RM700,000 | (RM500k x 1.25%) + (RM200k x 1.00%) | RM8,250 |
| Subtotal | RM24,050 | ||
| SST 6% | RM1,443 | ||
| Total legal fees | RM25,493 |
If this is an HDA developer transaction and the developer absorbs the SPA fee, the buyer pays only the loan agreement fee and MOT fee: approximately RM16,800 after SST.
Total upfront cash needed: worked examples
The table below combines MOT stamp duty, loan stamp duty (0.5%), legal fees (Table A, 90% loan, SST included), and estimated disbursements. It assumes a Malaysian citizen buying a subsale (non-developer) property with no exemptions.
| Property price | MOT stamp duty | Loan stamp duty | Legal fees (incl. SST) | Disbursements | Total |
|---|---|---|---|---|---|
| RM300,000 | RM5,000 | RM1,350 | RM11,528 | RM500 | RM18,378 |
| RM500,000 | RM9,000 | RM2,250 | RM19,213 | RM500 | RM30,963 |
| RM700,000 | RM15,000 | RM3,150 | RM25,493 | RM600 | RM44,243 |
| RM1,000,000 | RM24,000 | RM4,500 | RM34,715 | RM600 | RM63,815 |
| RM1,500,000 | RM44,000 | RM6,750 | RM50,085 | RM700 | RM101,535 |
Note: this table excludes the property valuation fee (typically RM300 to RM500), mortgage insurance (MRTA or MLTA), and the 10% deposit paid at SPA signing. For the full cost picture including those items, see the real cost of buying property in Malaysia.
How stamping actually happens: LHDN STAMPS
All stamp duty is now processed through LHDN’s STAMPS portal (e-Stamping system), which replaced physical stamping at LHDN offices. The process works as follows:
- Your lawyer prepares the instrument (MOT or loan agreement) and uploads it to STAMPS.
- LHDN assesses the duty and issues a payment notice.
- Payment is made online (FPX or credit card).
- A digital stamp certificate is issued and attached to the instrument.
Time limit: Instruments signed in Malaysia must be stamped within 30 days of execution. Instruments signed overseas must be stamped within 30 days of arrival in Malaysia.
Late stamping penalties (effective February 2025):
- Within 3 months of the due date: RM50 or 10% of unpaid duty, whichever is higher
- More than 3 months after the due date: RM100 or 20% of unpaid duty, whichever is higher
In practice, your lawyer handles STAMPS on your behalf. The cash you transfer to your lawyer’s client account covers stamp duty, legal fees, and disbursements in one batch.
Key takeaways
- MOT stamp duty is tiered at 1%, 2%, 3%, and 4% on ascending price bands. The tiers are cumulative, not flat.
- Loan agreement stamp duty is a flat 0.5% on the loan amount, no exceptions for Malaysian citizens.
- Legal fees under SRO 2023 are capped at 1.25% for the first RM500,000 of value, then 1.00%, plus 6% SST.
- Developer (HDA) properties attract a 25% to 40% automatic discount on SPA legal fees; many developers absorb the fee entirely.
- First-time buyers of properties at RM500,000 and below are fully exempt from both MOT stamp duty and loan stamp duty for SPAs signed before 31 December 2027.
- For a RM500,000 subsale purchase, total government and legal charges run to approximately RM31,000 before the down payment and valuation fee.
- All stamp duty is paid electronically via LHDN’s STAMPS system within 30 days of signing.
Frequently asked questions
Does stamp duty apply to both buyer and seller?
The MOT stamp duty is borne entirely by the buyer. The seller does not pay stamp duty on the transfer (though the seller may be subject to Real Property Gains Tax if the property is sold within 5 years of acquisition, which is a separate charge). See RPGT and property taxes in Malaysia for details.
I am buying a property priced at RM490,000. Does the first-time buyer exemption cover the full amount?
Yes. The exemption is a full 100% waiver on MOT stamp duty and loan stamp duty for properties at RM500,000 and below. The RM490,000 price falls within the ceiling so you pay zero stamp duty on both instruments, provided your SPA is signed by 31 December 2027 and you meet all eligibility criteria.
Can my lawyer charge more than the SRO 2023 scale?
No. The SRO 2023 sets mandatory maximum fees. A lawyer may charge less (up to a 25% voluntary discount is permitted) but cannot exceed the prescribed scale. If you are quoted significantly above the scale, request an itemised breakdown and compare it against the published tables.
Why is there a separate legal fee for the MOT if I am already paying SPA legal fees?
The SPA is the sale contract between buyer and seller. The MOT is a separate instrument lodged at the Land Registry to register the title in your name. Both require separate legal work and attract separate fees under SRO 2023. Some firms bundle them and apply a single fee, but the underlying regulatory basis covers both documents.
My bank is using their own lawyer for the loan. Do I still pay loan legal fees?
Yes. Even when the bank appoints their own panel lawyer for the loan documentation, the legal fee on the loan agreement is charged to you (the borrower) under SRO 2023. You cannot negotiate this away, though you may find panel lawyers offer the maximum 25% voluntary discount as a competitive practice.
Malaysia-based chartered management accountant (ACMA, CGMA) and embedded executive who has worked across finance, operations, and product roles with Malaysian companies. Every WangWise guide is checked against official Malaysian sources. How we review · About the editor
Educational content only, not financial advice. Verify current figures with official sources.