How To Stamp Tenancy Agreement
I first became a "landlord" and signed my first ever tenancy agreement 2 years ago. Now it's time to renew it.
Last
time my property agent helped me to do everything including finding
tenant, drafting the agreement and doing the stamping. I think I should
learn to do it myself.
For tenancy agreement, we can download it free of charge from internet and just make some necessary amendment.
To
know how and where to do the stamping, a search in internet brought me
to a good local property investment blog known as "horlic".
However, this blog seems to be inactive now...
Here are steps I went through to get the tenancy agreement stamped.
- Prepare 2 copies of tenancy agreement signed by both parties
- Download and fill up PDS 1 & PDS 49A forms. Forms are available at LHDN website & branches
- Bring the forms and tenancy agreement to nearest LHDN branch. Get a queue number for stamp duty and then submit to stamp duty counter
- Wait for your name to be called at payment counter and then pay the stamp duty
- Get the tenancy agreement back and go home
*LHDN = Lembaga Hasil Dalam Negeri (Inland Revenue Board)
As there was not many people when I went there, I get everything done in less than 10 minutes.
It's much easier than I thought.
According
to the staff there, now we can only stamp the tenancy agreement within
30 days after the starting date of tenancy period.
For
example, if you rent your property from 15th April 2015 to 14th April
2017, you can only stamp the agreement from 15th April 2015 to 14th May
2015.
However, I'm not sure how strict they are with this new rule. Previously we can stamp it before the date of tenancy period.
How much stamp duty we have to pay?
LHDN staff will have a list to refer to, but we can calculate the stamp duty by ourselves using a formula.
To know how much to pay, calculate your annual rental first then refer to the table below.
| Annual Rental | Tenancy period | ||
| < or = 1 year | > 1 to 3 years | > 3 years | |
| First RM2400 | Exempted | Exempted | Exempted |
| Every RM250 after RM2400 | RM1 | RM2 | RM4 |
The
first RM2400 of annual rental is exempted from stamp duty. This means
that if your monthly rental is not more than RM200, you don't need to
pay stamp duty.
It's easier to understand by using example.
If your rental is RM1200 per month and tenancy period is 2 years, annual rental will be RM14400.
As first RM2400 is exempted from stamp duty, only RM12000 will be charged.
So RM12000 divided by RM250 = RM48.
As it is a 2-year agreement, RM48 x RM2 = RM96.
The stamp duty will be RM96. However, we need to pay another RM10 for second copy of agreement.
So, total payable to LHDN will be RM106.
This stamp duty is commonly paid by tenants.
What if the calculated stamp duty is not a round number?
Lets say if you rent your property at RM1600 per month for 1 year. Stamp duty will be:
[(RM1600 x 12) - 2400] / 250 = RM67.20.
I'm not sure whether it will be rounded up to RM67 or RM68. Those who knows might want to clarify on this.
In conclusion, DIY your tenancy agreement stamping is not difficult at all.
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