Stamping for Rental Agreement in Malaysia: A Comprehensive Guide
In Malaysia, stamping is an essential process for many legal documents, including rental agreements. It is a mandatory requirement under the Stamp Act 1949, and failure to comply with the regulations can result in legal consequences. Therefore, it is crucial to understand the stamping process for rental agreements in Malaysia to ensure that you are following the law.
What is stamping?
Stamping is a process where a document is certified with an adhesive stamp by the Inland Revenue Board (Lembaga Hasil Dalam Negeri – LHDN) to indicate that the necessary stamp duty has been paid. The stamp serves as proof that the document has been legally executed and registered.
Why is stamping important for rental agreements?
Stamping for rental agreements in Malaysia is mandatory under the Stamp Act 1949. The purpose of this act is to ensure that the government collects revenue from various legal agreements. Therefore, stamping is essential to legalize the rental agreement and avoid legal consequences for non-compliance.
Who is responsible for stamping the rental agreement?
Under Malaysian law, it is the responsibility of the tenant to stamp the rental agreement. The tenant must pay the stamp duty and submit the agreement to the Inland Revenue Board (LHDN) for stamping. The stamp duty is based on the rental amount and the duration of the lease, and it must be paid within 30 days of the agreement’s execution.
What is the stamp duty for rental agreements in Malaysia?
The stamp duty for rental agreements in Malaysia is calculated based on the rental amount and the duration of the lease. Here is a breakdown of the stamp duty rates:
Rental amount:
– Less than RM 2,500: RM 1
– Between RM 2,500 and RM 5,000: RM 2
– More than RM 5,000: RM 10
Duration of lease:
– Less than 1 year: The stamp duty is calculated based on the rental amount.
– 1 year or more: The stamp duty is calculated based on the rental amount multiplied by the number of years, plus a fixed fee.
For example, if the rental amount is RM 2,000 per month, and the lease is for three years, the stamp duty would be RM 2 x 36 months + RM 10 = RM 82.
How to stamp a rental agreement?
To stamp a rental agreement in Malaysia, the tenant must follow these steps:
1. Pay the necessary stamp duty at any appointed Stamp Office or through e-stamping.
2. Purchase the adhesive stamp of the appropriate value.
3. Affix the stamp to the rental agreement on the date of the agreement’s execution.
4. Submit the stamped rental agreement to the Inland Revenue Board (LHDN) within 30 days of the date of the agreement’s execution.
Conclusion
Stamping for rental agreements in Malaysia is a mandatory process that ensures the legality of the agreement and ensures that the government collects revenue from legal transactions. As a tenant, it is your responsibility to stamp the rental agreement, pay the stamp duty, and submit the agreement to the Inland Revenue Board (LHDN) for stamping. By following the regulations, you can avoid legal consequences and ensure that your rental agreement is legally binding.