How Much Tenancy Agreement Cost In Malaysia?
Introduction
Renting a property in Malaysia involves various legal processes, with the tenancy agreement being a critical aspect. As a potential tenant, it’s essential to grasp the expenses associated with creating this agreement. This blog post aims to provide insights into the costs of preparing a tenancy agreement in Malaysia, including rent stamp duties and tenancy agreement fees. Let’s delve into the details!
Table of Contents
Understanding The Tenancy Agreement
Let’s start by understanding what a tenancy agreement is all about before diving into the costs. Essentially, it’s a formal document signed by both the landlord and the tenant, outlining the terms and conditions of renting a property. This includes important details such as how long the rental will last, how much rent will be paid each month, and any extra rules or clauses.
Think of it as a way to ensure both parties are on the same page and to prevent any confusion or disagreements down the line.
Now, let’s talk about the expenses involved. When creating a tenancy agreement, it’s wise to involve a lawyer to ensure it’s fair and legally sound for everyone. This agreement should cover key points like the property’s address, the rent amount, how much deposit is required, and the specific terms of the lease.
Once the agreement is drafted, it needs to be stamped by the Inland Revenue Board of Malaysia (LHDN) to make it legally valid. However, this stamping process comes with some costs, including stamp duty, administration fees, or legal fees that need to be paid. It’s an important step to ensure the agreement holds up legally.
Here’s a simplified table for stamp duty rates:
Lease Duration | Stamp Duty |
---|---|
1-year | RM1 for every RM250 of annual rental above RM2,400 |
1-3 years | RM2 for every RM250 of annual rental above RM2,400 |
Over 3 years | RM4 for every RM250 of annual rental above RM2,400 |
Now, who pays for this stamp duty? Well, the tenant will cover the main stamp duty, and the landlord pays for a copy of the stamped agreement which costs RM10.
What about admin fees? Here’s a quick guide:
Monthly Rental Rate | Admin Fee |
---|---|
RM1,000 and below | RM100 |
RM1,001 to RM2,000 | RM150 |
RM2,001 to RM3,000 | RM200 |
RM3,001 to RM4,000 | RM250 |
RM4,001 and above | RM300 |
Next up, legal fees. Just remember, starting July 15, 2023, the fees will be standardized:
Monthly Rental | Legal Fees |
---|---|
RM10,000 or less | 30% of the monthly rent (minimum RM500) |
Exceeding RM10,000 | Minimum of 15% of rent but not exceeding 25% |
To get your tenancy agreement stamped, you can use the online LHDN Stamp Assessment and Payment System (STAMPS) – It’s completely online and user friendly!
Lastly, let’s talk about taxes. From January 1, 2018, rental income in Malaysia is taxed progressively from 0% to 30%. However, you can get an exemption if your rental income doesn’t exceed RM2,000 per month for each residential property. Plus, this isn’t limited to one property – the more you rent, the more you save!
Check Out 5 Important Costs To Consider When Selling A House In Malaysia
Hopefully, that clears things up for you! Once your agreement is signed, stamped, and all fees are paid, you’re good to go. Enjoy your journey in property rental!
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