As a tenant, you may be aware of the legal requirement to have your tenancy agreement stamped. However, if you fail to comply with this requirement, you may face penalties that could put you in financial difficulty. In this article, we will discuss everything you need to know about tenancy agreement stamping and the penalties you may face for non-compliance.
What is tenancy agreement stamping?
Tenancy agreement stamping is a legal requirement in Malaysia. It is the process of affixing a stamp duty to a tenancy agreement to make it legally binding. The stamp duty is a tax imposed by the government on legal documents, and it is a way for the government to generate revenue.
All tenancy agreements, regardless of their duration, must be stamped. The stamp duty rate for tenancy agreements is RM10 for every RM1,000 of the total rental amount payable for the duration of the tenancy agreement.
What are the penalties for non-compliance?
Failure to stamp your tenancy agreement can result in penalties that could be financially devastating. The penalties for non-compliance can be broken down into two categories:
1. Penalties imposed by the government
If you fail to stamp your tenancy agreement within 30 days of the date of the tenancy agreement, you will be liable to a penalty of 10% of the total stamp duty payable. If you fail to stamp your tenancy agreement for more than 30 days, the penalty will increase to 20% of the total stamp duty payable.
2. Penalties imposed by the landlord
Your landlord may also impose penalties for non-compliance. These penalties can vary, but they can include:
– A fine of 1 month`s rent
– Termination of the tenancy agreement
– Legal action to recover the outstanding stamp duty and any associated penalties
How can you avoid penalties?
To avoid penalties for non-compliance, you should ensure that your tenancy agreement is stamped within 30 days of the date of the agreement. You should also confirm with your landlord that the stamp duty has been paid.
If you are unsure whether your tenancy agreement has been stamped, you can check the stamp duty status online using the stamp duty calculator provided by the Inland Revenue Board of Malaysia (IRBM). Simply enter your tenancy agreement details, and the calculator will tell you whether your agreement has been stamped and the amount of stamp duty payable.
Tenancy agreement stamping is a legal requirement in Malaysia, and failure to comply with this requirement can result in penalties that could be financially debilitating. To avoid penalties, you should ensure that your tenancy agreement is stamped within 30 days of the date of the agreement and confirm with your landlord that the stamp duty has been paid. If you are unsure whether your agreement has been stamped, you can check the stamp duty status online using the IRBM`s stamp duty calculator. Remember, complying with the law is always the best course of action.