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to become a new landlord or perhaps soon to be, for your first rental
property!
Hunting and screening for a good tenant is not an easy task and I agree
sometimes it depends on luck, too. We leave this topic first and to be
discussed in my future post.
If you have gone through the process and secured an ideal tenant at a very
good ROI rental rate, congratulate you, again!
Bear in mind, never rent your house without a tenancy agreement, I do not
encourage doing so as I prefer to pay more tax for the extra rental income
on top of my salary. It helps Mortgage officer to have more confidence to
persuade their bank to approve my next home loan.
Remarks: If possible, instruct your tenant to bank in rental money into one
particular bank savings account, easier for bank to identify the rent.
Then, it comes to our topic today, 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. To save cost, google it, there are a
lot of sample in internet. Else, ask around your friends and colleagues, Im
sure some of them got it.
Who should bear the costs for preparing Tenancy Agreement, Stamp Duty
and disbursement? Tenant or landlord? I have yet to get the firm answer
from a reliable source. Your valuable input is much appreciated. But it is a
common practice that tenant to absorb the costs.