A tenancy agreement in Malaysia is a contract between landlord and tenant that must be stamped at LHDN to be admissible in court. Stamp duty is calculated on the annual rent above RM2,400, and the standard deposits are two months' rent (security) plus half a month (utilities). Here's what to include and how the cost works.
What a Tenancy Agreement Should Include
- Parties, property address and tenancy term (commonly 1 year, renewable)
- Monthly rent, payment date, and the deposits held
- Security deposit (typically 2 months' rent), utility deposit (½ month), and advance rent (1 month)
- Responsibilities for repairs, utilities, and the inventory of fittings
- Termination, renewal and the notice period
Tenancy Agreement Stamp Duty
Stamp duty is charged on the annual rent exceeding RM2,400, at a rate that depends on the lease term (LHDN scale):
- Up to 1 year: RM1 for every RM250 of annual rent above RM2,400
- Over 1 to 3 years: RM2 for every RM250
- Over 3 years: RM4 for every RM250
Example: rent RM1,500/month = RM18,000/year. Chargeable = RM18,000 − RM2,400 = RM15,600 → RM15,600 ÷ 250 = 62.4 → 63 units → RM63 for a 1-year lease. Add a nominal fee per duplicate copy. Estimate related costs with the stamp duty calculator. (Rates as reviewed 2026 — confirm current LHDN scale before stamping.)
Stamping and Legality
An unstamped tenancy agreement is still valid between the parties but cannot be used as evidence in court until stamped. Stamp within 30 days of signing to avoid penalties; stamping is done via LHDN (online via STAMPS or at a branch).
For Landlords: Maximise Your Return
Know your area's achievable rent before setting terms — check the rental yield calculator and browse comparable rental listings. To buy a unit to let, see the best property investment areas.
Frequently Asked Questions
How is tenancy agreement stamp duty calculated in Malaysia?
Stamp duty is charged on the annual rent above RM2,400. For a lease up to 1 year it is RM1 per RM250 of that chargeable amount; RM2 per RM250 for over 1 to 3 years; and RM4 per RM250 for over 3 years. For example, rent of RM1,500/month (RM18,000/year) on a 1-year lease works out to about RM63.
How many months deposit for a tenancy in Malaysia?
The market norm is 2 months' rent as the security deposit, plus half a month's rent as the utility deposit, and 1 month's advance rent — roughly 3.5 months' rent upfront. These amounts are conventions, not law, so they can be negotiated.
Is an unstamped tenancy agreement valid in Malaysia?
It remains valid between landlord and tenant, but it cannot be admitted as evidence in court until it is stamped at LHDN. You should stamp within 30 days of signing to avoid penalties. Stamping can be done online via the STAMPS system or at an LHDN branch.