Stamp Duty Exemption for First-Time Homebuyers in Malaysia (Extended to 2027)

If you're buying your first home in Malaysia, stamp duty is one of the biggest upfront costs after your down payment — and one of the easiest to avoid entirely if you know how the exemption works. Budget 2026 extended the 100% stamp duty exemption for first-time buyers by another two years, to 31 December 2027. Here's exactly what that means for your wallet.

What Is Stamp Duty, Exactly?

Stamp duty is a tax charged by the Inland Revenue Board (LHDN) on legal documents involved in a property purchase. When you buy a home in Malaysia, you'll typically pay two separate stamp duties:

• MOT stamp duty — on the Memorandum of Transfer (the document that legally transfers ownership to you), calculated on the higher of the purchase price or market value.
• Loan agreement stamp duty — a flat 0.5% of your total loan amount, charged on the facility agreement with your bank.

For Malaysian citizens and PRs, MOT stamp duty is tiered — each price bracket is taxed at its own rate, not the whole price at the top rate:

This is the baseline. The first-time homebuyer exemption removes this cost entirely — but only under specific conditions, which we'll get into next.

The First-Time Homebuyer Exemption, Explained

Under Budget 2026, the government extended the 100% stamp duty exemption for first-time homebuyers for another two years — now running until 31 December 2027. The exemption covers both the MOT stamp duty and the loan agreement stamp duty, provided the home is priced at RM500,000 or below.

In practical terms: if you qualify and your first home is RM500,000 or under, you pay RM0 stamp duty on the transfer document and RM0 on your loan agreement. This applies to both new developer units (primary market) and sub-sale properties (secondary market), as long as the eligibility conditions are met.

Are You Eligible? Full Checklist

To qualify for the full exemption, you need to tick every box below:

• You are a Malaysian citizen (foreigners are not eligible for this particular exemption).
• You have never owned any residential property in Malaysia before — under your own name, jointly, inherited, or gifted.
• The property is residential, not commercial or industrial.
• The purchase price is RM500,000 or below.
• The Sale & Purchase Agreement (or instrument of transfer) is executed within the exemption period, currently running to 31 December 2027.

How Much You Actually Save (Worked Examples)

Here's what the exemption is worth in ringgit, assuming 90% financing:

At the RM500,000 ceiling, that's over RM11,000 back in your pocket — enough to cover legal fees, moving costs, and a good chunk of your renovation budget.

What Happens Above the RM500,000 Cap

To put this in perspective, let's use a real Carrot Property listing: The Maple Residences @ Taman OUG, priced from RM643,000. At that price, with 90% financing, here's what you'd actually pay — no exemption applies:

This is exactly why it's worth checking your budget against the RM500,000 line before you fall in love with a unit — the difference in upfront cost between a RM495,000 home and a RM505,000 home isn't RM10,000, it's closer to RM16,000+.

How to Claim the Exemption, Step by Step

1. 1
   Confirm eligibility with your lawyerBefore signing the SPA, tell your conveyancing lawyer you intend to claim first-time buyer exemption so they prepare the right documents.
2. 2
   Sign the SPA / instrument of transferThis must happen within the exemption period (by 31 December 2027).
3. 3
   Lawyer submits via e-Duti Setem (MyTax portal)Under the SDSAS self-assessment system, your lawyer declares and applies for the exemption electronically — you don't need to visit LHDN in person.
4. 4
   Stamp within 30 days of executionBoth the MOT and loan agreement must be stamped within 30 days of signing, even when the duty payable is RM0.
5. 5
   Keep every documentLHDN can audit and reassess stamp duty exemptions for up to 7 years — retain your SPA, loan agreement, and stamping receipts.

Common Mistakes That Disqualify Buyers

• Assuming inherited property doesn't count. It does — if your name was ever on a residential title, you're not a first-time buyer anymore.
• Buying a shop-office or SoHo unit classified as commercial. The exemption only applies to residential property.
• Missing the execution deadline. The SPA or transfer instrument must be signed within the exemption window — a delayed booking can push you past it.
• Assuming partial exemption above RM500,000. As covered above, there's no sliding scale — you either qualify in full or not at all.
• Not telling the lawyer early. Exemption paperwork needs to be prepared alongside the SPA, not requested afterward.

What About Foreign Buyers?

This exemption is strictly for Malaysian citizens. Foreign buyers face the opposite trend: effective 1 January 2026, the flat stamp duty rate for foreign individuals and foreign-owned companies buying residential property doubled from 4% to 8% of the property's value — on top of standard eligibility requirements like minimum purchase thresholds set by each state. If you're a foreign buyer weighing a Malaysian purchase, budget for this rate separately; it does not follow the tiered citizen structure at all.

FAQs

Does the exemption apply to sub-sale (secondary market) homes too?

Yes. As long as the price is RM500,000 or below and you meet the other eligibility conditions, both new developer units and existing sub-sale homes qualify.

Can my spouse and I both claim first-time buyer exemption on a joint purchase?

The exemption is assessed per buyer named on the title. If either party has previously owned residential property, this can affect the joint purchase's eligibility — check with your lawyer on how your specific ownership structure is treated.

Is the exemption automatic, or do I need to apply?

It isn't automatic — your lawyer must declare and claim it through the e-Duti Setem / MyTax self-assessment system when stamping your documents.

What if my home price is exactly RM500,000?

RM500,000 is included in the exemption ("RM500,000 or below"), so a home at exactly that price still qualifies for the full exemption.

This article is for general guidance only and does not constitute legal or financial advice. Stamp duty rules and exemption periods are subject to change by LHDN and the Ministry of Finance — always confirm current eligibility with a licensed conveyancing lawyer before signing any agreement.