Renting a shop lot, office space or warehouse is a step almost every business goes through at some point. What often gets overlooked is the stamp duty obligation that comes with the tenancy agreement itself. Fortunately, the duty treatment follows a fairly clear step by step structure once you understand the few factors involved, and that is what we break down here.

Stamp duty on tenancy and lease agreements depends on a few factors. These include when the agreement is signed, whether the rental period starts on, before or after that signing date, the length of the rental period, and the rent or other yearly consideration agreed upon.

If your rental period is 3 years or less, it is treated as a tenancy. Anything beyond 3 years is a lease, and this comes with an extra step. Under the National Land Code, leases exceeding 3 years must be executed together with Borang Pajakan (Form 15A) and registered at the Pejabat Tanah dan Galian (PTG), on top of stamping the main agreement.

For the main agreement, duty on ordinary rent is charged per RM250 of rent or average annual rent, and the rate increases with the rental period, ranging from RM1 for terms of 1 year or less up to RM7 for terms exceeding 5 years. Some agreements also involve a lump sum payment to the landlord on top of regular rent, often described as key money or a premium, paid upfront just to secure the tenancy. This premium is taxed separately using a different rate table based on the amount involved, rather than the rent-based table. Where an agreement includes both ordinary rent and this kind of upfront premium, the duty for each is worked out on its own, then the two amounts are added together for the total payable. Some agricultural or land based leases that state rent as a share or percentage of produce instead attract a flat RM10 duty.

For leases that need Form 15A, there is a separate fixed RM10 duty on the form itself, but only once the underlying agreement has already been properly stamped. Other related lease documents tied to an already stamped agreement, such as renewals, sub-tenancies or sub-leases, are also charged this same flat RM10 rather than the full rate again.

Responsibility for payment falls mainly on the tenant, while the landlord bears duty on any copies of the agreement. If you are signing a new tenancy or a longer lease, it is worth checking the duty and PTG registration requirements early as part of your usual leasing process.

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.