When a business buys or sells property, the stamp duty is not simply calculated on the purchase price stated in the agreement. Under Item 32(a) of the First Schedule, the duty is calculated on either the consideration (the price you paid) or the market value of the property, whichever is higher. The government is not going to let buyers under-declare the transaction value to reduce their stamp duty bill.

The rates under Item 32(a) are tiered. You pay RM1 for every RM100 on the first RM100,000 of value, RM2 per RM100 on the next band up to RM500,000, RM3 per RM100 on amounts between RM500,000 and RM1 million, and RM4 per RM100 on anything above RM1 million. On a commercial property transaction worth RM3 million, for instance, this adds up to a significant sum that needs to be planned for in your cash flow.

What many businesses do not anticipate is the additional assessment process under Sections 36A, 36AA, and 36B. The Collector of Stamp Duties (IRB) can assess what they call advance duty or initial duty based on the consideration price, and then come back later with an additional assessment if their government valuer determines the market value is higher than what was declared. If you used the initial duty assessment under Section 36A, and the final assessed duty is more than 30% above what was already paid, a further 10% surcharge applies on the excess. For advance duty under Section 36AA, the surcharge applies only if you fail to pay the additional duty within 30 days. This can catch businesses off guard, especially in commercial property deals where market values can differ significantly from transacted prices.

There is also a notably higher rate for foreign buyers. Under Item 32(aa), transfers of property to a foreign company or a non-citizen, non-permanent resident attract a flat rate of RM4 for every RM100, regardless of which value band the price falls in. If your business structure involves foreign shareholders taking property in Malaysia, this is a cost you must account for upfront.

My little suggestion is never budget for stamp duty based purely on your agreed transaction price. Always get a sense of the current market value of the property and factor in the possibility of an upward revision by the IRB. Surprises here come in the form of additional assessments with a short payment window.

If any of your business documents from this period were not properly stamped, there is currently a window to put things right. LHDN has extended the Stamp Duty Special Voluntary Disclosure Programme by six months, now running from 1 July 2026 to 31 December 2026. Documents executed between 1 January 2023 and 31 December 2025 can be regularised within this period without facing the usual penalty. Our CFO advisory team helps businesses stay ahead of regulatory changes without disruption. Reach us on WhatsApp at 010-246 2151.