April 28, 2011

UPDATES: Procedure to stamp tenancy agreement

When a house is rented out, the house owner should draft two copies of tenancy agreement (one original copy and another duplicate copy) between himself and the tenant. If there's a group of people going to rent your house, you should elect one responsible person as the "leader". The house owner should attach a list of inventories in the house and the identification card of the "leader" together with the tenancy agreement to be stamped in Inland Revenue Department (Lembaga Hasil Dalam Negeri).

Following is the procedure to stamp the tenancy agreement with printed stamped:

  1. Fill in PDS 1 form - a sample is available here. You just need to fill in the item 2 and 3, sign the form and the officer will fill in the remaining part of the form.
  2. Fill in PDS 49 A form - a sample is available here. Fill in the form with the details from your tenancy agreement. You need to fill in two copies of this form.
  3. Hand over the forms and both copies of tenancy agreement to the officer at the counter.
  4. Once your turn is up, proceed to the payment counter to pay the stamp duty and wait for your documents to be stamped using a stamping machine.
There are many other forms for stamp duty to be filled in, depending on the purpose and stamping methods. There's even an e-stamp online system (which I'm yet to be familiarized with), but based on my personal observation over the past few years, I don't see the crowd especially S&P lawyer firms are using such system.

As for the calculation of the stamping fees for tenancy agreement, the following formula is used for the stamping fees of original copy of tenancy agreement:

Stamp duty payable = (Annual gross rental - RM2400)/250 * Y

where Y = 1 for one year agreement
          Y = 2 for 2 to 3 years agreement
          Y = 3 for > 3 years agreement

The cost for stamping fee for duplicate copy of the tenancy agreement is always RM10. Even though there's no rules mentioned on who should bear the cost of stamping fees, it is a normal practice that the tenant has to pay for the stamping fees of original and duplicate copies of the tenancy agreement.

UPDATES: Changed the link to PDS 1 and PDS 49A forms.

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