General information only, not legal advice. Last reviewed: 26 October 2026 by Aini Shakira.
Budget 2027, tabled on 9 October 2026, proposes to widen the stamp duty exemption for Malaysians buying their first home. If you are looking at a home priced between RM500,000 and RM750,000, the date you sign your sale and purchase agreement (SPA) could make a difference of several thousand ringgit. Here is what the official documents say, with worked examples.
The current position
Today, a Malaysian citizen buying a first residential home priced up to RM500,000 gets a 100% stamp duty exemption on both the instrument of transfer (the MOT) and the loan agreement. It applies to SPAs signed from 1 January 2021 to 31 December 2027 (MOF, Budget 2027 tax measures, Appendix 16).
There is no first-home exemption for a home priced above RM500,000 under the current rules.
What Budget 2027 proposes
According to the Ministry of Finance's tax annex and the Budget speech (para 56):
- Homes priced up to RM500,000: 100% exemption on the loan agreement and the instrument of transfer.
- Homes priced up to RM750,000: 100% exemption on the first RM500,000 of the price, and 50% exemption on the part of the price above RM500,000, up to RM750,000.
- Effective for: loan agreements and instruments of transfer for SPAs signed from 1 January 2027 to 31 December 2030.
The proposal does not describe any relief for homes priced above RM750,000.
This is a proposal, not law. It takes effect only after the Finance Bill is passed and the exemption orders are gazetted, and the details can change along the way (The Star, 9 Oct 2026).
Worked examples: stamp duty on the MOT
Stamp duty on a transfer is charged on the price or the market value, whichever is higher, at these rates for Malaysian buyers, under Item 32(a) of the First Schedule to the Stamp Act 1949 (Act 378):
| Portion of the price or market value | Stamp duty |
|---|---|
| First RM100,000 | 1% (RM1 per RM100) |
| Next RM400,000 (above RM100,000 up to RM500,000) | 2% (RM2 per RM100) |
| Next RM500,000 (above RM500,000 up to RM1,000,000) | 3% (RM3 per RM100) |
| Above RM1,000,000 | 4% (RM4 per RM100) |
Sources: Stamp Act 1949 (Act 378), First Schedule, Item 32(a), as set out in LHDN's stamp duty guideline on First Schedule instruments (30 June 2026); the 4% band above RM1,000,000 was added by section 68(d) of the Finance Act 2018 (Act 812), in force from 1 January 2019.
Note: The rates above do not apply to foreign purchasers, who are subject to different stamp duty treatment. From 1 January 2026, a sale of residential property to a foreign company, or to a person who is not a Malaysian citizen and not a permanent resident, is charged at a flat RM8 per RM100 (8%) of the price or market value, whichever is greater, under Item 32(ab) of the First Schedule, inserted by section 29 of the Finance Act 2025 (Act 874).
The examples below assume the price is the higher figure and the buyer meets every condition.
Example 1: a RM500,000 home
| Stamp duty on the MOT | |
|---|---|
| Normal duty: RM1,000 (1% × RM100,000) + RM8,000 (2% × RM400,000) | RM9,000 |
| Current rules (SPA signed by 31 Dec 2027) | RM0 |
| Budget 2027 proposal (SPA signed 2027–2030) | RM0 |
At this price, the proposal mainly extends the existing full exemption from 2027 to 2030.
Example 2: a RM700,000 home
| Stamp duty on the MOT | |
|---|---|
| Normal duty: RM9,000 on the first RM500,000 + RM6,000 (3% × RM200,000) | RM15,000 |
| Current rules (no first-home exemption above RM500,000) | RM15,000 |
| Budget 2027 proposal: RM9,000 fully exempt; 50% of RM6,000 exempt | RM3,000 |
On our reading of the proposal, the buyer in Example 2 would pay RM3,000 instead of RM15,000. How the 50% is calculated will depend on the wording of the final exemption order.
The proposal also covers the loan agreement, which is normally stamped at 0.5% of the loan amount. The MOF documents do not say how the 50% portion would apply to a loan agreement, so we have not given a figure for it.
Why the SPA date matters
The proposal applies by the date the SPA is signed, not by when the transfer is stamped or registered.
- A buyer of a RM700,000 first home who signs on 31 December 2026 would fall outside the proposed window, so the full RM15,000 would apply.
- The same buyer signing on or after 1 January 2027 could qualify, if the proposal becomes law in its current form.
- For homes up to RM500,000, the existing exemption already covers SPAs signed up to 31 December 2027, so the timing point is mainly relevant above RM500,000.
Before you delay a purchase, weigh up the risk of losing the unit, price changes, booking-fee terms and loan approval timelines, and remember that the final law may differ from the proposal.
Who is eligible
The Budget documents state only that the relief is for Malaysian citizens buying their first residential home. The detailed conditions will be set out in the new exemption orders.
For reference, the conditions under the current exemption, as set out in LHDN's statutory declaration for the transfer (P.U.(A) 53/2021 read with P.U.(A) 448/2025), are:
- the purchase price does not exceed RM500,000;
- the property is residential, and does not include SOHO, SOFO, SOVO or service apartment units;
- when the SPA is signed, the buyer has never owned any residential property, including property inherited or received as a gift, whether held alone or jointly; and
- the buyer has not had this exemption approved before.
The buyer signs a statutory declaration, and the exemption can be withdrawn, with duty and penalties, if the information turns out to be untrue. It is not yet known whether the 2027–2030 orders will keep these conditions.
Other changes from 2027
Separately, stamp duty self-assessment is due to extend to instruments of transfer of property (those not involving a JPPH valuation) from 1 January 2027 (PwC Malaysia Tax Booklet). Buyers signing in 2027 should allow for that change in procedure.
Talk to us
If you are planning a first-home purchase and would like to check how the current rules and the Budget 2027 proposal apply to your situation, see our real estate services or contact us at www.chlnlaw.com:
- Kuala Lumpur office: SO-33-3A, Strata Office, Menara 1 KL Eco City, Jalan Bangsar, 59200 Kuala Lumpur · +603 2201 6336
- Puchong office: +603 8066 2889
Office hours: Monday to Friday, 9:00 am to 6:00 pm.
Sources
- Ministry of Finance, Budget 2027 Tax Measures, Appendix 16, "Review of Stamp Duty Exemption for the Purchase of First Residential Home": https://belanjawan.mof.gov.my/pdf/belanjawan2027/ucapan/tax-measures.pdf
- Budget 2027 Speech, para 56 (9 Oct 2026): https://belanjawan.mof.gov.my/pdf/belanjawan2027/ucapan/bs27.pdf
- The Star, "Budget 2027: Stamp duty exemption for first-time homebuyers" (9 Oct 2026): https://www.thestar.com.my/news/nation/2026/10/09/budget-2027-stamp-duty-exemption-for-first-time-homebuyers
- LHDN, statutory declaration for the instrument of transfer, P.U.(A) 53/2021 read with P.U.(A) 448/2025: https://stamps.hasil.gov.my/stamps/files/announcement/1770693299.pdf
- Stamp Act 1949 (Act 378), First Schedule, Item 32(a) and Item 32(ab), as set out in LHDN, Garis Panduan Pengenaan Duti Setem bagi Surat Cara yang Tertakluk kepada Jadual Pertama Akta Setem 1949 (30 June 2026), Part C, para 2.1: https://www.hasil.gov.my/wp-content/uploads/garis-panduan-pengenaan-duti-setem-jadual-pertama-as-1949.pdf
- Finance Act 2018 (Act 812), section 68(d) (amendment of Item 32(a), in force 1 January 2019 under section 63(2)): https://mysst.customs.gov.my/wp-content/uploads/2025/03/Finance-Act-2018.pdf
- Finance Act 2025 (Act 874), section 29 (amendment of the First Schedule, inserting Item 32(ab)), in force 1 January 2026 under section 25: https://www.hasil.gov.my/wp-content/uploads/Akta-Kewangan-2025-Akta-874.pdf
- PwC Malaysia, Malaysian Tax Booklet, Stamp duty (secondary reference, stamp duty self-assessment point only): https://www.pwc.com/my/en/publications/mtb/stamp-duty.html
This article is general information only and is not legal advice. Budget 2027 measures are proposals until the Finance Bill is passed and the relevant orders are gazetted, and rates, conditions and dates may change. The figures above are illustrations only. The position for any purchase depends on the property and your circumstances, so please obtain advice on your specific matter.
C H LEE NORA, Advocates & Solicitors · KL Eco City: SO-33-3A, Strata Office, Menara 1 KL Eco City, Jalan Bangsar, 59200 Kuala Lumpur · T +603 2201 6336 · Puchong: T +603 8066 2889 · www.chlnlaw.com