What a Foreigner Actually Pays to Buy in Malaysia — Stamp Duty Jumps to 8% in 2026
From 1 January 2026, transfer stamp duty on residential property bought by a non-citizen who is not a Malaysian permanent resident is a flat 8% (up from 4%), charged on the consideration or the market value, whichever is higher — and the statute puts it on the buyer. It was enacted in the Finance Act 2025, gazetted 31 December 2025.
At the same time you cannot use either of the first-home stamp duty exemptions a local buyer gets — neither on the transfer nor on the loan agreement.
Then add two costs only foreigners pay: the State Authority consent application fee, and in several states a foreigner levy (Penang charges 3% of acquisition value). On the same RM1 million home, your upfront cost runs well over RM100,000 higher than a local first-time buyer's.
The 8%: how it is computed and who bears it
The Finance Act 2025 (Act 874, royal assent 27 December 2025, gazetted 31 December 2025) inserts item 32(ab) into the First Schedule of the Stamp Act 1949:
On sale of any residential property from 1 January 2026 to a foreign company or a person who is not a citizen and not a permanent resident — RM8.00 for every RM100.00 of the consideration or the market value of the residential property, whichever is the greater.
Three details that matter:
- Malaysian permanent residents are carved out. The provision excludes PRs expressly — they pay local rates.
- It is a single flat rate, not a band structure. Some Budget 2026 commentary described foreigners paying "between 4% and 8% depending on value". That was a pre-enactment misreading; the enacted rate is one flat 8% with no value bands.
- The buyer pays. The same Act amends item 7 of the Third Schedule, replacing "the parties in equal shares" with "the grantee or transferee".
"Residential property" now has a statutory definition — a new definition in section 2 of the Stamp Act covers a house, condominium, apartment, flat, service apartment or SOHO solely to be used as a dwelling. Non-residential property stays on the existing item 32(aa) rate. Whether a given unit falls inside that line is a judgement on its actual use and title, so get your solicitor to confirm it in writing rather than assuming.
🔴 Because it takes the higher of price and value, an inflated price costs you twice. If a seller lifts the price to clear a state threshold, you fund the loan gap in cash (the bank lends on valuation) and pay 8% on the inflated portion.
The full foreign-buyer cost list — with our confidence marking
This is arithmetic on verified rates, not a quotation. Your real numbers come from your solicitor's formal estimate.
What both pay: SPA legal fees on the scale, roughly RM11,250 (first RM500,000 × 1.25% + next RM500,000 × 1%), plus disbursements, SST and the valuation fee.
What only the foreign buyer pays:
- Transfer stamp duty at 8% = RM80,000. A qualifying local first-time buyer may be exempt.
- The state consent application fee — we could not source Kuala Lumpur's official figure, so we leave it blank rather than invent one. The same line is RM10,000 per title in Penang and RM200 per title in Selangor. That gap is not a typo; states really are that far apart.
- If you buy in a levy state, add it: the same RM1 million in Penang costs a further RM30,000 (3%).
On stamp duty alone the foreign buyer is RM80,000 behind an exempt local first-timer. Add a Penang levy and consent fee and the upfront gap clears RM120,000 easily — and none of it becomes equity. It is pure cost.
The six line items people leave out of the budget
- The 8% takes the higher of price and valueWhichever is greater governs. Inflating the price to clear a threshold raises this line too.
- There are two sets of legal feesOne for the sale and transfer, one for the loan documents, both on the same scale. Budgeting only one leaves a five-figure hole.
- The consent fee is per title, not per transactionPenang charges a foreign individual RM10,000 for each title. If your purchase involves more than one title, the fee multiplies.
- Penang's levy has a 30-day deadlinePayable within 30 days of the approval letter; late payment needs an extension application (RM500 per title); after a year the approval lapses and the whole application restarts.
- 7% is withheld again when you exitOn sale, the buyer's solicitor must retain 7% of the price as your RPGT retention. That is a cash-flow issue, not the tax itself — a non-citizen non-PR pays 30% for the first five years and 10% from year six.
- Do not skip asking about the valuation feeThe published valuation scales contradict each other, which is why we refuse to print one. Get a written quote from a licensed valuer instead of copying a table that may be wrong.
Frequently asked questions
What is the stamp duty for foreigners buying property in Malaysia in 2026?
A flat 8% from 1 January 2026, on residential property bought by a foreign company or by an individual who is not a Malaysian citizen and not a permanent resident, charged on the consideration or market value, whichever is higher. It was 4%. The authority is item 32(ab) of the First Schedule to the Stamp Act 1949, inserted by the Finance Act 2025 (Act 874). Malaysian permanent residents are not affected and continue on local rates.
Who pays the 8% — buyer or seller?
The buyer. The same Finance Act 2025 amends item 7 of the Third Schedule to the Stamp Act, replacing "the parties in equal shares" with "the grantee or transferee". The liability sits squarely on the purchaser.
Does the 8% apply to shops and offices too?
No — only to residential property. A definition inserted into section 2 of the Stamp Act defines it as a house, condominium, apartment, flat, service apartment or SOHO solely to be used as a dwelling. Non-residential transfers stay on the existing item 32(aa) rate. Whether a particular unit sits inside that definition turns on its actual use and title, so have your solicitor confirm it in writing rather than assuming.
Can foreign buyers claim the first-home stamp duty exemption?
No. Neither the first-home transfer exemption nor the loan-agreement exemption is available to foreign buyers. Those two exclusions, together with the 8% rate, are the largest source of the cost gap between a foreign buyer and a local first-time buyer.
How much does State Authority consent cost?
It varies enormously, and for most states we could not find an official figure. The two we verified: Penang charges a foreign individual RM10,000 per title for residential (PR RM2,000, company RM20,000); Selangor charges RM200 per title for a first application and RM1,000 on appeal. Penang additionally imposes a levy of 3% of acquisition value (1.5% for island strata between RM1m and RM1.5m), while Selangor's official page shows no percentage levy. For other states, ask that state's land office — we found no published source.