MOT Stamp Duty for Foreign Property Buyers in Malaysia (2025–2026 Complete Guide)

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Foreign buyers purchasing residential property in Malaysia must pay Memorandum of Transfer (MOT) stamp duty at a flat foreign‑buyer rate, and Budget 2026 raises this significantly compared to Malaysians’ tiered rates. A clear understanding of these rules helps overseas buyers plan cash flow, compare markets and avoid surprises when investing in Malaysian condos, landed homes or MM2H‑type properties.​

What is MOT in Malaysia?

The Memorandum of Transfer (MOT) is the legal instrument that officially transfers property ownership from the seller (or developer) to the buyer and must be stamped and registered at the Land Office in Malaysia. Without a properly stamped MOT, ownership is not perfected in the land register, so MOT stamp duty is a compulsory part of every property transaction.​

Stamp duty on the MOT is calculated as a percentage of the property price (or market value, if higher) and is payable to LHDN (Inland Revenue Board) within a prescribed time frame, typically within 30 days from the date of execution for local transactions. Separate stamp duties apply to the loan agreement (usually 0.5% of loan amount), but this article focuses on the MOT (transfer) component, where foreign‑buyer treatment differs.​

Malaysian vs foreign buyer MOT stamp duty

For Malaysian citizens, MOT stamp duty on residential property uses a progressive (tiered) structure: 1% on the first RM100,000, 2% on the next RM400,000, 3% on the next RM500,000, and 4% on the amount above RM1,000,000. First‑time Malaysian homebuyers enjoy full exemption on MOT and loan stamp duty for homes up to RM500,000 until 31 December 2027, following Budget 2026.​

Foreign buyers are treated differently: they pay a flat MOT stamp duty rate on residential property transfers instead of the tiered citizen structure. Policy and tax commentaries indicate that non‑citizen foreign buyers currently face a flat 4% MOT stamp duty on residential property, regardless of price, with permanent residents (PR) specifically excluded from this higher foreign category.​

Quick comparison

Buyer type	MOT stamp duty on residential property (2025)
Malaysian citizen	Progressive 1–4% tiers based on price. ​
Malaysian first‑time buyer ≤RM500k	0% on MOT and loan stamp duty up to RM500,000 (until 31 Dec 2027). ​
Non‑citizen foreign individual	Flat 4% MOT stamp duty (current structure). ​
Foreign‑owned company	Generally subject to same foreign‑buyer flat rate for residential property. ​
Permanent resident (PR) of Malaysia	Treated like Malaysian citizens, excluded from foreign flat‑rate category. ​

Budget 2026: higher flat rate (up to 8%)

Budget 2026 introduces a major change: the Government proposes a flat stamp duty rate of between 4% and 8% on the transfer of ownership of residential properties by non‑citizens and foreign companies, excluding permanent residents. The stated policy intent is to keep the property market competitive while controlling upward pressure on house prices for locals.​

Tax and legal analyses interpret this as effectively doubling the flat foreign‑buyer MOT rate for residential properties from 4% to a likely flat 8% for instruments executed on or after 1 January 2026, subject to final implementing legislation. Commentaries also highlight that this foreign rate hike is targeted at residential assets; commercial properties and other asset classes may continue under separate or standard stamp duty regimes unless further specified.​

How MOT is calculated: simple examples

The MOT stamp duty is computed on the property price (or assessed value), multiplied by the applicable rate for the buyer category.​

• Example 1 – foreign buyer under current 4% flat rate (2025):
  A non‑citizen foreign individual buys a residential condo at RM1,200,000.
  MOT stamp duty = RM1,200,000 × 4% = RM48,000.​
• Example 2 – same transaction under proposed 8% foreign rate (from 2026):
  If the same RM1,200,000 purchase falls under an 8% flat foreign rate,
  MOT stamp duty = RM1,200,000 × 8% = RM96,000.​
• Example 3 – Malaysian buyer for comparison (tiered):
  For a Malaysian citizen buying at RM1,200,000, the tiered structure applies:
  1% on first RM100,000 + 2% on next RM400,000 + 3% on next RM500,000 + 4% on remaining RM200,000,
  for a total of RM34,000, significantly lower than the flat foreign rate.​

These examples show how the foreign flat rate (especially if moved to 8%) can materially increase entry costs for high‑value residential investments.​

Practical implications for foreign buyers

For general foreign residential buyers – whether looking at KLCC condos, KL landed homes, Penang seafront units or Johor MM2H‑type properties – the key implications are:

• Higher upfront cash requirement: A doubled MOT rate from 4% to 8% meaningfully raises the cash needed at completion, particularly for purchases above RM1 million.​
• Stronger price sensitivity: Investors may negotiate harder on purchase price or seek projects where developers absorb part of stamp duty to offset the increased MOT cost.​
• More careful timing: Executing the MOT (and SPA timelines) before versus after the effective date of new rates can change total tax cost, so legal advice on timing becomes crucial.​
• Focus on rental and capital yield: With higher entry costs, the projected rental yield and long‑term appreciation need to be strong enough to justify the investment.​

Many developers in key markets are already responding with packages that include partial or full stamp duty subsidies, rebates or legal‑fee incentives to keep net entry costs attractive for overseas buyers. Foreign purchasers should evaluate these offers carefully, ensuring that “rebates” do not artificially inflate list prices and that all incentives are reflected transparently in the Sale and Purchase Agreement.​

Key reminders & action checklist

Policies announced in Budget 2026 still require enabling legislation and detailed guidelines, so exact rates and thresholds may be fine‑tuned before full enforcement. Nonetheless, the direction is clear: residential MOT for non‑citizen foreign buyers is moving higher, and PRs continue to be treated differently from other foreigners.​

For any foreign buyer planning a Malaysian residential purchase:

• Confirm your status (non‑resident, MM2H, PR, company structure) and how it affects stamp duty.​
• Ask your solicitor to estimate MOT and loan stamp duty under both current and proposed regimes before signing.​
• Check whether your chosen developer offers stamp duty or legal‑fee subsidies – and how they are documented.​
• Monitor Budget 2026 implementation updates so you do not misjudge your actual payable rate at the time of MOT execution.​

This general framework applies across Malaysia and can be used to evaluate different locations and project types, from city condos to suburban landed homes and MM2H‑oriented developments.