Stamp duty for tenancy agreement

It is better to have the tenancy agreement stamped.


What is the formula to calculate stamp duty fee charged by government if your house is rented ?
Here is step-by-step calculation:

Step 1: Calculate the total of annual rental (e.g.: RM1,700 per month x 12 months = RM20,400)
Step 2: Calculate the taxable rental. The first RM2,400 of your annual rental is entitled for stamp duty exemption (e.g.: RM20,400 – RM2,400 = RM18,000)
Step 3: For every RM250 or part thereof in excess of RM2,400, different rates will be applied to calculate the payable Stamp Duty according to tenancy period as following:-

• RM1 will be charged for tenancy period 1 year or less;
• RM2 will be charged for tenancy period more than 1 year but equal to 3 years or less than 3 years;
• RM4 will be charged for tenancy period exceeding 3 years or more.

Rental	Tenancy Period (= or < 1 year)	Tenancy Period (> 1 year, = or < 3 years)	Tenancy Period (> 3 years)
First RM 2,400	Exempted	Exempted	Exempted
Every RM 250 or part thereof in excess of RM2,400	RM 1.00	RM 2.00	RM 4.00

Example 1: Tenancy Period = 1 year
Payable Stamp Duty,
= (RM18,000 / RM250)* x RM1
= 72 x RM1
= RM72

Example 2: Tenancy Period = 2 years
Payable Stamp Duty,
= (RM18,000 / RM250)* x RM2
= 72 x RM2
= RM144
Example 3: Tenancy Period 5 years
Payable Stamp Duty,
= (RM18,000 / RM250)* x RM4
= 72 x RM4
= RM288
*round-up figure
Step 4: For second copy of tenancy agreement, the stamping cost is RM10.

Total Cost Involved (for tenancy period of 1 year, DIY tenancy agreement),
= Stamp Duty + Stamping for 2nd Copy + Disbursement
= RM72 + RM10 + RM118
= RM200

If you get a lawyer to draft for a standard residential tenancy agreement, they might charge you from RM200 to RM400, depending on the rental rates and complexity of the agreement. Who should bear the costs for preparing Tenancy Agreement, Stamp Duty and disbursement? Tenant or landlord? The tenant normally absorbs the costs as they need the agreement to protect them from being evicted anytime.