How Is Malaysia Property Stamp Duty Calculated? MOT and Loan Duty

When you receive a cost estimate for buying property in Malaysia, it helps to separate two main stamp duty items: the stamp duty on the property transfer instrument, and the stamp duty on the financing instrument where there is a loan.

The two use different calculation bases. The first looks at the transaction consideration and the property’s market value; the second generally looks at the loan or security amount. Neither percentage should simply be multiplied by the sale price on its own.

This article focuses on the general purchase and residential loan situation for an individual buyer who is neither a Malaysian citizen nor a Malaysian permanent resident (PR).

Property Transfer Stamp Duty: First Confirm Your Status and the Property Category

The fee commonly called “MOT stamp duty” is the stamp duty charged on the memorandum of transfer. MOT is the name of the transfer instrument; not every property transaction is completed through this one document alone.

Under the rules taking effect from 2026, the property transfer for the non-citizen, non-PR individual buyer described above generally follows:

These are flat rates, not the progressive rates that generally apply to citizens and PR holders. A buyer who holds PR should calculate their own duty separately based on their own status, and should not assume an exemption applies just because of that status.

A Serviced Apartment or SOHO Unit Is Not Automatically Non-Residential

The Stamp Act’s definition of “residential” includes houses, apartments, flats, serviced apartments and SOHO units used for residential purposes.

So a unit should not be assumed to fall under the non-residential rate just because the project sits on a commercial title, or because its name includes the word “office.” The classification should be confirmed by a lawyer based on the statutory definition and the transaction documents.

For a Transaction Spanning 2025 and 2026, Check the Dates Separately

The new 8% rate takes effect from January 1, 2026, but a transaction spanning the two years should not be assumed to fall under the old rate simply based on the year the SPA was signed.

Where the agreement was signed earlier but approval was obtained, or the assessment for stamping was submitted, later, the SPA date, the transfer instrument date and the submission date should all be checked with a lawyer, and confirmed with LHDN if necessary.

The Tax Base: Whichever Is Higher, the Transaction Consideration or the Property’s Market Value

For an ordinary sale, the transfer stamp duty is calculated on whichever of the following two figures is higher:

• The transaction consideration, usually the price agreed in the contract
• The property’s market value as assessed for stamp duty purposes

JPPH (the Valuation and Property Services Department) generally helps determine the property’s market value, and LHDN then assesses the stamp duty payable. The valuation a bank uses for a loan is not necessarily the same as the market value used for the stamp duty assessment.

For example, if the transaction price is RM1,000,000 but the assessed market value is RM1,100,000, the duty has to be calculated on RM1,100,000, not on the transaction price alone.

Loan Instrument Stamp Duty: Generally 0.5% of the Loan Amount

For the main instrument of an ordinary home loan, the common estimation method is:

• Loan amount × 0.5%

For example, on a loan amount of RM600,000, the general calculation gives RM3,000.

The actual amount still depends on the financing documents, any applicable relief, and how the charge is structured. Ancillary instruments may also carry a flat stamp duty, so “loan amount × 0.5%” should not be treated as the one and only charge that will necessarily appear across the full set of documents.

If the purchase is paid entirely with the buyer’s own funds, with no loan or related financing instrument, this main loan-instrument stamp duty does not apply.

Worked Example: One Transaction, Two Tax Bases

Assume:

• The buyer is a non-citizen, non-PR individual
• The purchase is a residential property subject to the 8% rate
• The transaction price is RM1,000,000
• The assessed market value for stamp duty is RM1,100,000
• The loan amount is RM600,000
• No relief applies

The loan amount in this example is only an assumption used for the calculation and does not mean a bank would approve a loan at the same margin of financing. The total also excludes stamp duty on any other instruments, legal fees, registration fees or state consent-related fees.

In addition, the statutory wording for the 8% residential rate is RM8 for every RM100 or part of RM100. All the figures in this example are round numbers; where the actual tax base includes a fraction, it needs to be rounded up according to the statutory unit.

When You Receive a Quote, Check These Five Points

• Buyer status: Has it been correctly distinguished between non-citizen, PR, and individual or company?
• Property category: What is the basis for classifying it as residential or non-residential?
• Transfer tax base: Is it using the transaction price or a higher market value, and is the valuation still pending?
• Loan tax base: Is it using the amount actually stated in the financing instrument?
• Relief and other instrument fees: Does any relief apply, and has the quote left anything out or double-counted anything?

If the market value has not yet been determined, the quote should note that the figure is an estimate. Using the transaction price alone for an initial budget is fine, but a buffer should be kept for the difference if the assessed market value later comes in higher.

Frequently Asked Questions

Is MOT stamp duty always calculated on the transaction price?

No. It is generally calculated on whichever is higher between the transaction consideration and the property’s market value. When the transaction price is lower than the assessed market value, the higher market value is used as the tax base.

I hold Malaysian PR. Do I still pay the 8% rate?

The flat 8% rule described in this article, for a non-citizen individual, excludes Malaysian permanent residents. A PR buyer should calculate their duty separately based on the applicable general rate and their own circumstances.

Does a serviced apartment on a commercial title always pay only 4%?

This cannot be assumed automatically. A serviced apartment that meets the statutory definition of residential may still fall under the residential rules, and needs to be confirmed based on the property and the transaction documents.

If I buy entirely in cash, is there no stamp duty at all?

Stamp duty on the property transfer and other applicable instruments may still apply. Not having a loan generally just means the loan-instrument stamp duty item does not apply.

Disclaimer

This article explains the general calculation method; the worked example does not represent the assessment outcome for any individual transaction. Where a transaction spans two years, involves joint buyers, special financing or relief, the calculation should follow the actual instruments and LHDN’s applicable rules.

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