Key Changes and New Implementations of Stamp Duty in 2026

Key Changes and New Implementations of Stamp Duty in 2026

Self-Assessment Regime
Malaysia is moving from an official assessment system (where the Inland Revenue Board / land office assesses how much stamp duty you pay) to a self-assessment regime in phases.

Phase 1 from 1 January 2026: applies to rental/lease agreements, general stamping, and securities.

Phase 2 from 1 January 2027: instruments of property ownership transfer.

Phase 3 from 1 January 2028: all others not covered in phases 1 & 2.

What the Exemption / Remission Is (Budget 2026)

The government has extended the full stamp duty exemption on transfer instrument (i.e. Memorandum of Transfer / instrument of ownership transfer) and loan agreement for first-time homebuyers who buy residential properties priced up to RM500,000 until 31 December 2027.

Eligibility Criteria
To qualify for the exemption, one usually must satisfy all of the following:

Criterion	What Is Required / Typical Conditions
First-time homebuyer	The buyer must be a Malaysian citizen who has never owned a residential property before.
Residential property	The property must be residential (houses, apartments, etc.). Commercial properties are generally not eligible under this exemption.
Property price limit Price	must be ≤ RM500,000 to get full exemption.
Instruments covered	Both: – the instrument of transfer / ownership transfer (MOT or equivalent) and – the loan agreement for financing / mortgage. These are the documents usually exempted under this policy.
Time period	The exemption extension is in place until 31 December 2027. The SPA / transfer and loan agreement must be executed within that period.
What is Not Covered or Partial / Remission Cases (Prior / Other Price Bands)	There were partial exemptions for properties priced between RM500,001 to RM1,000,000 for first-time buyers (e.g. 50% or 75%), depending on policy period. But for the new extension under Budget 2026, the full exemption only applies up to RM500,000 subjected to further announcement if applicable property value up to RM1,000,000.00

Things to Watch Out For / Conditions

“First-time” definition: Must confirm that you’ve never had property in Malaysia in your name, etc., as required. Some programmes may have additional declarations.

Check property type: Some properties perhaps not considered “residential” under certain exemption orders or definitions (e.g. service apartments in some cases, depending on regulations) so it’s important to verify.

Ensure documents are executed in time: The SPA, loan agreements, instrument of transfer must be executed or stamped within the period that the exemption is valid (i.e. before expiry date).

Application / Declaration: Sometimes you’ll need to fill out certain statutory declarations or apply via LHDN indicating you are first-time buyer, etc.

State / Developer limitations: Some state governments or private developers may have additional restrictions or require specific conditions for eligibility.

FOREIGNER BUYER
From 1 January 2025, a flat rate of 4% stamp duty on instruments of property transfer for non-citizen individuals (excluding Malaysian permanent residents) and foreign companies.

Proposed / Expected Changes for 2026
The government proposes to increase the current fixed stamp duty rate for instruments of transfer of residential property by foreign buyers (non-citizens / foreign companies, excluding permanent residents) from 4% to 8%.

This 8% flat rate would apply to transfers of residential property executed on or after 1 January 2026.

The change is part of a broader effort to moderate speculative foreign demand in the housing market and to preserve affordability for local buyers.

TRANSFER BY LOVE AND AFFECTION
Transfers of property “by love and affection,” or otherwise between family members, though some are exempt or minimally charged, are more clearly regulated. Sometimes even when there is no monetary consideration, ad valorem duty may be imposed unless a flat minimal fee applies.
However, no duty exemption will be given to such transfer by foreigners.

PENALTIES
Penalties for insufficient or late stamping have been increased. For example, penalties of either RM50 or 10% of the deficient duty (whichever is higher), rising to RM100 or 20% for more delayed filing.
The Stamp Assessment & Payment System (“STAMPS”) is being used / expanded. Electronic stamping and assessments will become more standard.

APPLICABLE SYSTEM
Still under official assessment by LHDN (self-assessment for property transfers only starts in 2027).
Duty is calculated based on existing tiered ad valorem rates under the Stamp Act 1949.

STAMP DUTY CALCULATION (Ad Valorem Rate)
Property Value Tier                                              Rate                                                   Duty (RM)
First RM100,000 1%                                                            1,000
Next RM400,000 (100,001–500,000) 2%                                                            8,000
Next RM500,000 (500,001–1,000,000.00) 3% 15,000
Above 1 Million 4%                                                               Value

View Key Changes and New Implementations of Stamp Duty in 2026 details on official website Know more about this service. More Details

Tan, Daha & Fadzilah Advocates & Solicitors Indonesia

Indonesia