When it comes to renting a property in Malaysia, stamp duty on tenancy agreements is a necessary cost that you need to factor in. The amount of stamp duty payable depends on several factors such as the duration of the tenancy, rental amount, and type of property. In this article, we will take you through the process of calculating stamp duty on tenancy agreements in Malaysia.
Step 1: Determine the rental amount
The first step in calculating the stamp duty is to determine the rental amount for the property. This amount should be clearly stated in the tenancy agreement.
Step 2: Determine the tenancy period
The second step is to determine the tenancy period. The tenancy period is the duration of the lease agreement. Stamp duty is charged based on the duration of the lease agreement.
For tenancy agreements below 3 years, the stamp duty is calculated as follows:
– For the first RM 1,000 of the rental amount, the stamp duty is RM 1
– For every RM 250 of the rental amount above RM 1,000, a stamp duty of RM 0.20 is charged
For tenancy agreements between 3 to 5 years, the stamp duty is calculated as follows:
– For the first RM 1,000 of the rental amount, the stamp duty is RM 2
– For every RM 250 of the rental amount above RM 1,000, a stamp duty of RM 0.50 is charged
Step 3: Determine the type of property
The third step is to determine the type of property. Different types of properties attract different rates of stamp duty. The rates are as follows:
– Residential properties: RM 1 for every RM 1,000 of the rental amount
– Commercial properties: RM 2 for every RM 1,000 of the rental amount
Step 4: Calculate the stamp duty
Using the information from the previous steps, you can now calculate the stamp duty payable. Here`s an example:
Let`s say you are renting a residential property for RM 3,500 per month, and your tenancy agreement is for 2 years. Using the formula above, the calculation would be:
Stamp duty = [(RM 2 x 3.5) + (0.2 x 2,500)] x 24 months = RM 420
In conclusion, calculating stamp duty on tenancy agreements in Malaysia requires you to know the rental amount, tenancy period, and the type of property. By following the steps outlined above, you can easily determine the amount of stamp duty payable on your tenancy agreement. Make sure to factor in this cost when budgeting for your rental expenses.