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Calculation of Stamp Duty on Tenancy Agreement in Malaysia

When entering into a tenancy agreement in Malaysia, one important consideration is the calculation of stamp duty. Stamp duty is a tax on legal documents and is payable to the government. It is a legal requirement to pay stamp duty on tenancy agreements in Malaysia, and failure to do so could result in legal consequences. In this article, we will discuss how to calculate stamp duty on tenancy agreements in Malaysia.

Firstly, it is important to understand that the stamp duty payable on a tenancy agreement in Malaysia is based on the term of the tenancy agreement. The term refers to the duration of the tenancy, which is typically stated in the agreement.

For a tenancy agreement with a term of less than one year, the stamp duty payable is RM1 for every RM250 of the annual rental value or part thereof. For example, if the annual rental value is RM10,000, the stamp duty payable would be RM40 (RM10,000 divided by RM250, multiplied by RM1).

For a tenancy agreement with a term of more than one year but less than three years, the stamp duty payable is calculated as follows:

(Annual rental value x term) / 250 = stamp duty payable

For example, if the annual rental value is RM24,000 and the term of the tenancy agreement is two years, the stamp duty payable would be:

(RM24,000 x 2) / 250 = RM192

For a tenancy agreement with a term of three years or more, the stamp duty payable is calculated as follows:

(Annual rental value x term) / 100 = stamp duty payable

For example, if the annual rental value is RM36,000 and the term of the tenancy agreement is three years, the stamp duty payable would be:

(RM36,000 x 3) / 100 = RM1,080

Furthermore, it is important to note that stamp duty on tenancy agreements should be paid within 30 days of the date of the tenancy agreement. Failure to do so may result in a penalty of 10% of the amount of stamp duty payable, up to a maximum of RM500.

In conclusion, when entering into a tenancy agreement in Malaysia, it is important to calculate and pay the stamp duty required by law. The stamp duty payable is based on the term of the tenancy agreement and the annual rental value. Failure to pay stamp duty on time could result in legal consequences. It is advisable to seek the advice of a legal professional or consult the Stamp Duty Act for further information.

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