At SAC Institutions, we aim to provide clear and reliable information to help individuals and organizations understand legal and financial obligations. One important aspect of renting property in Malaysia is the stamping fee for tenancy agreements, which ensures that the agreement is legally recognized and enforceable.
What is a Stamping Fee?
A stamping fee is a government-imposed charge collected by the Inland Revenue Board of Malaysia (LHDN) to validate tenancy agreements. Without proper stamping, the agreement may not be admissible in court, making it difficult to resolve disputes between landlords and tenants.
Why is Stamping Necessary?
- Provides legal recognition of the tenancy agreement.
- Protects both landlord and tenant in case of disputes.
- Ensures compliance with Malaysian law.
- Prevents penalties for unstamped agreements.
How is the Stamping Fee Calculated?
The stamping fee is calculated based on the annual rental amount stated in the tenancy agreement. The general structure is as follows:
- For the first RM2,400 of annual rent: Exempted from stamping fee.
- For every RM250 above RM2,400: RM1 stamping fee is charged.
- Additional nominal charges may apply for copies or extensions of agreements.
Example:
If the monthly rent is RM1,500, the annual rent is RM18,000. The stamping fee will be calculated according to the Inland Revenue Board’s schedule.
Who Pays the Stamping Fee?
Typically, the tenant is responsible for paying the stamping fee, unless otherwise agreed upon in the tenancy contract. However, both parties should clarify this responsibility before signing the agreement.
Process of Stamping a Tenancy Agreement
- Prepare the tenancy agreement with all necessary details.
- Submit the agreement to the Inland Revenue Board (LHDN).
- Pay the stamping fee based on the rental amount.
- Obtain the stamped copy as proof of legal validation.
Penalties for Unstamped Agreements
Failure to stamp a tenancy agreement may result in:
- Penalties imposed by LHDN.
- Agreement not being legally enforceable in court.
- Increased risk of disputes without legal protection.