As a tenant or landlord, it is important to understand the process of stamp duty when it comes to tenancy agreements. Stamp duty is a tax that is levied on legal documents, including tenancy agreements. This tax helps to ensure that the document is legally valid and enforceable. In this article, we will discuss the steps to calculate tenancy agreement stamp duty.
Step 1: Understand the Types of Tenancy Agreements
Before calculating stamp duty, it is important to understand the types of tenancy agreements. There are three types of tenancy agreements:
1. Fixed-term Tenancy Agreement: This type of tenancy agreement is for a specific period of time, typically six to twelve months.
2. Periodic Tenancy Agreement: This type of tenancy agreement is ongoing, with no end date specified. It can be terminated by either the tenant or landlord, with the proper notice.
3. Renewal Tenancy Agreement: This type of tenancy agreement is an extension of an existing tenancy agreement, with updated terms and conditions.
Step 2: Determine the Rent Amount and Tenancy Period
The next step in calculating stamp duty on a tenancy agreement is to determine the rent amount and tenancy period. For example, if the monthly rent is RM1,000 and the tenancy period is 12 months, the total rental payment would be RM12,000.
Step 3: Calculate the Stamp Duty
Once the rent amount and tenancy period are determined, the next step is to calculate the stamp duty. The formula to calculate the stamp duty on a tenancy agreement in Malaysia is:
Stamp Duty = RM1 for every RM250 of rental for the first RM2,400 + RM2 for every RM250 of rental payment exceeding RM2,400
Using the example above, with a total rental payment of RM12,000, the stamp duty calculation would be as follows:
Stamp Duty = (RM1 for every RM250 of rental for the first RM2,400) + (RM2 for every RM250 of rental payment exceeding RM2,400)
Stamp Duty = (RM1/250 x 2,400) + (RM2/250 x 9,600)
Stamp Duty = RM9.60 + RM38.40
Stamp Duty = RM48
Step 4: Pay the Stamp Duty
The final step is to pay the stamp duty. The stamp duty can be paid at the nearest Lembaga Hasil Dalam Negeri (LHDN) office or online through e-stamping. Once the payment is made, the tenancy agreement can be legally enforced.
In conclusion, calculating stamp duty on a tenancy agreement is a crucial part of the tenancy process. By understanding the formula for calculating stamp duty, tenants and landlords can ensure that they are paying the correct amount and that their tenancy agreement is legally valid and enforceable.