When seeking to rent a property in Malaysia, one of the essential documents you would need to sign is the rental agreement. This agreement outlines the terms and conditions of your tenancy, including the rental amount, payment period, security deposit, and other relevant details. However, one aspect of the rental agreement that often confuses many tenants is the stamp duty, which is a mandatory legal requirement for all rental agreements in Malaysia.
In this article, we will explore what rental agreement Malaysia stamp duty is, who is responsible for paying it, and how much it costs.
What is rental agreement Malaysia stamp duty?
Stamp duty is a tax levied by the government on legal agreements, including rental agreements. In Malaysia, the Stamp Act 1949 mandates that all rental agreements be stamped within 30 days of execution to be considered legally binding. The stamp duty on rental agreements is calculated based on the rental amount and the duration of the tenancy. The stamp duty is then paid to the Inland Revenue Board (LHDN), and the rental agreement is stamped as proof of payment.
Who is responsible for paying the stamp duty?
According to the Stamp Act 1949, the tenant is responsible for paying the stamp duty on the rental agreement. This means that when you sign a rental agreement in Malaysia, you would need to pay the stamp duty within 30 days of execution. Failure to pay the stamp duty within this period can attract penalties and fines from the government.
How much does rental agreement Malaysia stamp duty cost?
The stamp duty on rental agreements in Malaysia is calculated based on the rental amount and the duration of the tenancy. The current stamp duty rates for rental agreements are as follows:
– Rental amount below RM2,500: RM1 for every RM250 or part thereof of the annual rent
– Rental amount above RM2,500: RM2 for every RM250 or part thereof of the annual rent
For example, if your rental amount is RM1,800 per month, your annual rent would be RM21,600. Therefore, the stamp duty payable on your rental agreement would be RM86 (RM1 for every RM250 of the annual rent).
In conclusion, as a tenant seeking to rent a property in Malaysia, it is crucial to understand the rental agreement Malaysia stamp duty and its implications. Knowing who is responsible for paying it and how much it costs can help you avoid penalties and fines and ensure that you have a legally binding tenancy agreement.