Understanding Tenancy Agreement Stamp Duty and the Other Fees
When you rent out your unit to the other party, it is advisable to have a tenancy agreement (also known as ‘perjanjian sewa’ in Bahasa Malaysia) to protect your and the other party’s rights. There are also some costs to be incurred for preparing the contract.
Before that, we will explain the importance of a perjanjian sewa before explaining the related tenancy agreement fee and the calculation.
Importance of Perjanjian Sewa
A tenancy agreement in Malaysia usually lists the terms and conditions for the arrangements including the rights of the parties, that is the landlord and the tenant.
The usual terms are the amount of monthly rental, rental deposit, and utility deposits. The other terms are whether any furniture is provided in the unit and the renewal/extension option.
In some cases, the landlord may require the tenant to get his permission for any renovation.
As to the question of ‘tenancy agreement 1+1 meaning’, it means there is a fixed period of 1-year rental and another year extension is optional.
When there is an expired tenancy agreement Malaysia and if the tenants continue to stay in the property after the expiry, the tenants will be regarded as trespassing into the landlords’ unit and legal action may be taken against them.
Costs For Perjanjian Sewa
The tenants may pay some fees for the contract which are:
Stamp duty in Malaysia (known as ‘setem duti’) is a charge imposed by the Inland Revenue Board, known as Lembaga Hasil Dalam Negeri (LHDN) for stamping documents that are chargeable with setem duti, which includes a perjanjian sewa.
If there is an unstamped agreement or there is an insufficient stamp duty fee paid, it may cause further penalties from LHDN.
The tenancy agreement stamp duty calculation Malaysia follows the law, that is Stamp Act 1949 and the calculation will be explained in the section below.
After the amount of duties is assessed by the LHDN, the tenant will have to make the payment within 30 days.
For the calculation of fees for your situation, you can use our tenancy agreement stamp duty online calculator above.
Usually, a lawyer will prepare the contract for the parties and they will charge for their services. The computation will be explained in the section below.
Apart from setem duti, the tenant may still have to pay some other fees which include administration fees. This is a fee payable to the property estate agency that helps with the transaction.
On the other hand, the landlord may need to pay some taxes for the income gained from the rental.
Calculation For Setem Duti and Legal Fees
The following tenancy agreement stamp duty table shows the calculation for the duties:
|Duration of the Tenancy (years)
|Amount of setem duti
|The first RM 2,400 of total annual rental is exempted from stamp duty. Then, every RM 250 of the balance annual rental or part of is calculated as:
|Less than 1 year
|1 to 3 years
|Exceeding 3 years
Annual rental: Monthly rental x 12 months
An additional copy or copies of the agreement will be charged at RM 10 per copy.
You may use our tenancy agreement stamp duty calculator Malaysia above to calculate the fees.
The lawyer fees for perjanjian sewa follow the law, Solicitors’ Remuneration Order 2023, and are shown by the following calculation:
|Duration of rental (years)
|Not more than RM 10,000
|More than RM 10,000
|Up till 3 years
|Legal fee is 30% of the monthly rental (subject to a minimum of RM 500)
|Legal fee is a minimum of 15% but not exceed 25% of the monthly rent
|More than 3 years
|Legal fee is 60% of the monthly rent (subject to a minimum of RM1,000)
|Legal fee is a minimum of 30% but not exceeding 50% of the monthly rent
If you purchase a house and take a bank loan, then you may use our stamp duty calculator to calculate the related fees.
Frequently Asked Questions
How much is stamp duty for tenancy agreement?
The tenancy agreement stamp duty Malaysia will be charged according to the duration of the tenancy and the monthly rental as explained above. You may use our tenancy agreement stamp duty calculator above at the top of this page to calculate the amount of setem duti.
Do you need stamp duty for a tenancy agreement?
Yes, you need to pay the duties. Under the law, this contract is chargeable with the duties and the tenant has to pay for it. If the setem duti is not paid, generally the agreement can't be admitted as evidence in the court.
Who pays stamp duty on tenancy agreement?
According to the law, that is the Stamp Act 1949, the tenant has to pay the setem duti for the original contract. If there is an additional copy, the landlord has to pay duties for the additional copy.
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