Buying Costs in Malaysia for Foreigners: Stamp Duty, Legal Fees and Consent
From 1 January 2026, a foreign individual or foreign company buying a home in Malaysia pays stamp duty on the transfer at a flat 8% of the price or market value, whichever is higher. The change came through the Finance Act 2025 and doubled the previous top rate of 4%. For anyone budgeting a purchase on Langkawi, in Penang or in Johor, Malaysia stamp duty for foreigners in 2026 is now the largest single entry cost.
It is also simple to calculate, and the other costs follow published scales. This guide sets out each charge with a worked example, then looks ahead to the costs of selling.
Stamp duty for foreigners in 2026
The 8% rate applies to the transfer of residential property to a person who is neither a Malaysian citizen nor a permanent resident, and to foreign companies. The Inland Revenue Board, LHDN, defines residential property to include serviced apartments and small office home office units used solely as a dwelling, and has confirmed that the rate applies to agreements signed from 1 January 2026. Holding an MM2H pass or an employment pass leaves a buyer in the non citizen category.
Malaysian citizens and permanent residents pay on a sliding scale of 1% to 4%. Where a foreign spouse buys jointly with a Malaysian spouse, each share is stamped at its own rate.
The other costs
| Cost | Rate |
|---|---|
| Stamp duty on the transfer | 8% flat for foreign buyers |
| Stamp duty on a loan | 0.5% of the amount borrowed |
| Legal fees | 1.25% on the first RM 500,000, then 1% on the next RM 7 million |
| State consent | Set by each state, as a flat fee or a levy linked to value |
| Valuation | Bank panel valuer, on a published scale |
Developers often absorb some of these in their sales packages. At Tropicana Cenang on Langkawi, for example, the developer bears the sale and purchase agreement legal fees and the loan legal fees, so ask what is included before you compare homes.
A worked example on a hypothetical RM 1.2 million home
Take a hypothetical purchase at RM 1.2 million, about USD 295,000, by a foreign buyer using a loan of RM 700,000. Stamp duty on the transfer at 8% comes to RM 96,000, about USD 23,600. Legal fees on the purchase come to RM 13,250 under the scale. The loan adds stamp duty of RM 3,500 and RM 8,250 in legal fees. Together that is about RM 121,000, close to 10% of the price, before service tax, disbursements and the state consent charge.
Selling later
Real property gains tax applies when you sell. Foreign owners pay 30% on the chargeable gain within the first five years and 10% from the sixth year onwards, with an exemption of RM 10,000 or 10% of the gain, whichever is greater. A buyer purchasing from a foreign seller retains part of the price for LHDN, usually 7%, and your lawyer handles this at completion.
MM2H participants keep their qualifying home for 10 years, which fits the long holding period at which gains tax falls to 10%.
Planning your purchase
The costs are clear and predictable, so you can know your full entry cost before you commit. With Malaysia stamp duty for foreigners now a single flat rate, the main variables are your loan, your lawyer’s scale fee and the state consent charge, all of which your lawyer can quote before you sign. For a furnished, freehold beach home with managed letting, explore Clarissa Serviced Suites at Cenang Beach, browse Malaysia homes on the ALM property portal, and read our guide to foreign ownership in Malaysia for the state rules that sit alongside these costs.
Ringgit converted at RM 4.07 to the US dollar, September 2026. Rules and rates stated as at October 2026.
