Should You Stamp Your Tenancy Agreement with LHDN? What Really Happens If You Don’t (And Why It Still Matters)
Many Malaysians skip stamping their tenancy agreement because they want to save money or avoid one more chore. Others assume it’s only for commercial leases or believe a signed agreement is enough. Some even think that if a problem arises later, they can simply “stamp it when needed”.
But that is only half true, and half-truths in property matters often become expensive mistakes.
In reality, stamping is not about making the tenancy valid — it’s about making it enforceable. And when disputes happen, enforceability is what determines whether you win, lose, or get stuck in a long and frustrating process.
This article explains what stamping actually is, how much it really costs, what happens if you don’t do it, and whether stamping later is really a safe option.
1. What Does Stamping a Tenancy Agreement Actually Mean?
“Stamping” simply means submitting your signed tenancy agreement to LHDN and paying the appropriate stamp duty under the Stamp Act 1949.
This process does three things:
- It registers the agreement as an official instrument.
- It makes the document legally admissible in court or tribunal.
- It serves as proof that both parties entered into a formal rental contract.
It’s important to note that a tenancy agreement becomes valid the moment both parties sign it. Stamping does not create the contract — it strengthens its legal power.
2. Stamp Duty Is Not Expensive — Here’s the Actual Calculation
Stamp duty for residential tenancies is far more affordable than most people think. In fact, most tenancies cost between RM50 and RM150 to stamp.
Here’s how the fee is calculated.
2.1 How to Calculate the Stamp Duty fee
LHDN uses a straightforward formula and it is based on annual rent:
Stamp duty = RM1 for every RM250 of annual rent (or part thereof)
For example:
Monthly rent RM1,200 → Annual rent RM14,400
RM14,400 ÷ 250 = 57.6 → Stamp duty RM58
Monthly rent RM1,500 → Annual rent RM18,000
RM18,000 ÷ 250 = 72 → Stamp duty RM72
Monthly rent RM2,200 → Annual rent RM26,400
RM26,400 ÷ 250 = 105.6 → Stamp duty RM106
2.2 Stamp Duty on Deposits
All refundable deposits combined (security, utility, pet, etc.) are subject to a fixed RM10 duty.
Not RM10 each — RM10 total.
2.3 Duplicate Copies
Both parties must keep an original stamped copy of the agreement.
This means most agreements need at least two stamped copies:
- one for the landlord
- one for the tenant
It’s worth noting that additional copy is just RM10 each, instead of paying the full stamp duty again.
2.4 Typical Total Cost
For most Malaysian rentals, the total stamp duty normally falls between RM60 and RM120.
That’s exactly why stamping is widely considered the cheapest form of legal protection in a tenancy.
3. Is Stamping Legally Necessary?
From a contract perspective, no — your tenancy agreement is still valid even if it is not stamped.
However, under the Stamp Act:
- an unstamped tenancy agreement cannot be used in court or tribunal
- you cannot attach it as evidence
- you cannot rely on its terms in a dispute
This is why stamping matters.
The contract may be legally valid, but it becomes practically powerless until stamped.
4. What Happens If You Don’t Stamp the Agreement?
If both sides are cooperative, you might go through the entire tenancy without any issues. But when problems occur — and they do happen — an unstamped agreement creates several hurdles.
4.1 You Cannot Use the Agreement in Court or Tribunal
The Tribunal for Consumer Claims and civil courts will not admit an unstamped tenancy agreement as evidence. This includes disputes involving unpaid rent, utility bills, overstaying tenants, property damage, or deposit disagreements.
You must stamp it before you can proceed with your claim.
4.2 You Must Pay Late Stamping Penalties
Penalties for late stamping are tied to how long you waited to submit the agreement:
- within 3 months: RM10
- 3 to 6 months: 20% of the stamp duty
- more than 6 months: up to 100% of the stamp duty
In most cases, the penalty is still small. Many people see this and assume delaying stamping is fine. But the real issue is not the penalty — it’s what comes next.
5. If You Really Don’t Want to Stamp It Now — Can You Stamp Later Only When Needed?
Some landlords and tenants purposely delay stamping and only submit the agreement if a dispute happens. Technically, this is allowed. LHDN accepts late stamping, and once stamped, the agreement becomes usable in court.
But this approach carries a serious and often overlooked risk.
5.1 LHDN May Reject the Agreement Due to Missing or Incomplete Information
LHDN can refuse to stamp your tenancy agreement if key details are missing or unclear. This includes:
- missing signatures or initials
- incomplete names or IC numbers
- overwritten or corrected rental amounts
- mismatched signatures across pages
- unclear dates
- uninitialled amendments
- pages that appear altered
If any of these issues exist, LHDN may request corrections. Under normal circumstances, both parties can sign or amend the document easily.
But disputes are rarely normal. If your tenant has disappeared, refused to cooperate, or is actively fighting against you, getting them to re-sign anything may be impossible. Without their cooperation, the agreement cannot be corrected, and LHDN cannot stamp it.
Once LHDN refuses stamping, the agreement becomes unusable in court. This leaves the landlord without a strong legal foundation to recover unpaid rent, deduct deposits, or initiate eviction efficiently. The same applies to tenants who need to enforce their rights.
This is the real danger behind delaying stamping — not the penalty, but the possibility of losing legal protection entirely.
6. Why Stamping Immediately Is the Safer and Smarter Choice
Stamping early eliminates almost every major risk. Beyond the ability to use your agreement in court, there are several practical benefits that many people overlook.
6.1 The Cost Is Low Compared to Potential Losses
A RM60–RM120 stamping fee is insignificant compared to:
- two months’ unpaid rent
- RM1,000–RM4,000 utility bills left behind
- furniture or fixture damages
- cleaning or repainting costs
- legal delays
Stamping is essentially a low-cost insurance policy.
6.2 You Avoid the Risk of LHDN Rejecting the Agreement Later
When both parties are still cooperating, it is easy to correct missing initials, add dates, or clean up unclear details. You can fix errors instantly and submit the agreement without problems.
But once a dispute happens, cooperation disappears. A tenant who owes money or plans to overstay has zero incentive to help you fix or re-sign documents. Early stamping ensures that LHDN cannot reject your agreement later due to correctable mistakes.
7. Conclusion: Stamping with LHDN Is the Cheapest and Smartest Form of Protection
Stamp duty is not expensive, and the process is straightforward. Most tenancies cost less than RM120 to stamp, yet the protection it provides is worth thousands when disputes arise.
If someone chooses not to stamp immediately, they can still do it later. But they must also accept the real risk: LHDN may reject the agreement if key information is missing or unclear, especially when cooperation breaks down during a dispute.
To avoid these problems, stamp your tenancy agreement early and make sure you have at least two stamped copies — one for the landlord and one for the tenant. It is simple, affordable, and offers peace of mind throughout the tenancy.
And if you want an agreement that is stamping-ready, well-structured, and easy for both sides to understand, the DIYA role-specific tenancy packs come with clear legal languages and bilingual guidance so you can protect yourself confidently from day one.
