TLDR: Malaysia has extended the 100% stamp duty exemption for properties up to RM500,000 until 31 Dec 2027, giving first-time homebuyers major upfront savings.
In a move to make homeownership more accessible, the government has extended the stamp duty exemption for first-time homebuyers purchasing residential properties up to RM500,000 – now valid until 31 December 2027.
This extension, part of the broader measures under Budget Malaysia 2026, is designed to ease upfront costs and encourage property ownership among Malaysians.
But what exactly does this exemption mean for first-time buyers – and for investors eyeing sub-RM500,000 properties?
Read on to understand the full impact, along with what you should watch out for before jumping in.
Key Takeaways:
- The stamp duty exemption for first-time homebuyers on properties priced up to RM500,000 has been extended until 31 December 2027.
- The exemption covers both the instrument of transfer and the loan/financing agreement which significantly reducing upfront costs for eligible buyers.
- For first-time buyers, this means immediate savings (potentially thousands of ringgit), easing the burden of initial home purchase costs.
- For investors, the exemption may make the lower-cost segment (sub-RM500,000) more attractive: lower entry cost, possibly stronger rental demand, and better yield potential.
Stamp Duty Waiver in Malaysia:
What is Stamp Duty?
Stamp duty is a tax imposed on certain legal documents related to property transactions, most notably, the instruments of transfer (when ownership changes hands) and loan or financing agreements (when a mortgage is involved).
Typically, buyers pay stamp duty at standard rates, which adds to the overall cost of purchasing a property.
In the context of home-buying, stamp duty can amount to several thousands of ringgits.
A substantial cost on top of other expenses like down payment, legal fees, valuation fees, and loan processing fees.
The exemption announced under the 2026 budget effectively removes this cost component for eligible first-time buyers (up to a certain property value), making the initial financial barrier lower when acquiring a home.
Stamp Duty Extended Under Budget 2026
Under Budget 2026, the existing exemption on stamp duty for first-time homebuyers purchasing residential properties priced at RM500,000 or below has been extended for two more years, until 31 December 2027.
What is covered
- The exemption applies to both the instrument of transfer (i.e., transfer of ownership) and the loan/financing agreement.
- The purchase must be of a “first residential home”. Meaning the buyer must be a first-time homeowner, and the property price must not exceed RM500,000.
Implementation timeframe
- Sale and Purchase Agreements (SPAs) executed between 1 January 2026 and 31 December 2027 are eligible.
This extension gives prospective first-time buyers a wider window to plan, secure financing, and complete their purchase without worrying about stamp duty on two of the biggest documents in the property transaction.
What This Means for First-Time Homebuyers?
For first-time buyers, this announcement is a major relief and potentially a strong incentive to step into the housing market now, rather than later.
- Lower upfront cost. With stamp duty waived on both the ownership transfer and loan documents, buyers save potentially thousands of ringgits. This makes the initial outlay for a home significantly lighter.
- Reduced financial pressure. Buying a first home is often daunting. Without the burden of stamp duty, monthly loan repayments and other costs become more manageable, lowering the risk of overstretching financially.
- More flexibility post-purchase. The money saved from stamp duty can be redirected toward essentials like furniture, renovations, or settling-in costs. Making the transition into a new home smoother and less stressful.
In short, for many Malaysians, this extension makes homeownership far more achievable.
How to Get Stamp Duty Waiver as a First-Time Homebuyer
If you’re buying your first home, the stamp duty waiver is applied during the purchase process, not through a separate application.
Step 1: Confirm You’re a First-Time Buyer
You must not have purchased or owned any residential property before. This applies to both individual and joint buyers.
Step 2: Purchase an Eligible Property
The property must be:
- Residential
- Priced at RM500,000 or below
- Purchased within the eligibility period (now extended until 2027)
Step 3: Appoint a Lawyer
Your lawyer will:
- Prepare the Sale and Purchase Agreement (SPA)
- Submit the necessary documents to LHDN (Inland Revenue Board)
- Apply the stamp duty exemption on your behalf
No separate application is required from you.
Step 4: Sign the Statutory Declaration
You’ll need to sign a Statutory Declaration confirming that you are a first-time homebuyer. Providing false information can result in penalties.
Step 5: Enjoy the Stamp Duty Savings
Once approved, 100% of the stamp duty on the SPA and loan agreement will be waived.
But, What About Investors?
Although the exemption is ostensibly for first-time “homebuyers,” the ripple effects could benefit savvy investors especially those targeting lower-cost units.
- Attractive entry point. With lowered transaction costs, properties in the sub-RM500,000 segment become more attractive for investment. You get to stretch your capital further.
- Potential for higher yield. Affordable properties typically attract tenants seeking lower rents. If rental demand is strong, investors stand to benefit from steady demand and potentially good rental yields.
- Opportunity for bulk acquisition. For investors with capital, this could be a window to snap up one or more units while the economic incentives remain active.
However, as mentioned by the government, the exemption is only applied for first-time homebuyers.
So strictly speaking, investors (who already own one or more properties) may not qualify for the stamp duty waiver.
That said, lower competition in the sub-RM500,000 segment (if more first-time buyers move quickly) might indirectly create opportunities.
What Buyers and Investors Should Consider
While the stamp duty waiver is a significant benefit, it isn’t a guarantee as 100% good investment or a wise purchase. Here are some aspects to consider carefully:
i) Loan affordability: Even without stamp duty, you’ll still need to ensure that your loan repayment is manageable over the long term. And don’t forget other costs like maintenance, utilities, and interest.
ii) Location and growth potential: A low price is attractive, but only if the property is in a location with stable or rising demand, good infrastructure, and potential for capital appreciation.
iii) Fit with lifestyle or investment plan: Is the property suited for your lifestyle (for own-stay)? Or for investment, what will it attract tenants, and at what would the rental rate be? Convenience, amenities, and accessibility matter.
iv) Market conditions: While incentives help, overall real-estate market conditions like supply and demand, economic outlook, interest rates will high-likely affect long-term returns.
In other words: the exemption makes entry cheaper, but due diligence remains essential to ensure the property remains financially sound in the long run.
| Feature | Details |
| Who benefit | First-time buyers who are Malaysian citizens purchasing their first residential home |
| Eligible property value | Up to RM500,000 |
| Documents exempted | Instrument of transfer (ownership) AND loan/financing agreement |
| Period of exemption | SPAs executed between 1 Jan 2026 – 31 Dec 2027 |
| Financial benefit | Save thousands of ringgits in stamp duty = lower upfront cost |
| Ideal for | First-time homebuyers; possibly investors eyeing sub-RM500,000 units (with caution) |
Conclusion
In conclusion, the extension of the 100% stamp duty exemption for first-time homebuyers under Budget 2026 is more than just a small perk.
It represents a meaningful push by the government to make homeownership more accessible.
For many Malaysians, especially first-time buyers, this could be the window of opportunity to finally step onto the property ladder with less financial burden.
For investors, while the waiver itself may not directly apply, the policy could shift demand and dynamics in the affordable property segment, creating indirect opportunities.
That said, the exemption should not be the only factor in your decision.
Good location, realistic loan planning, and a clear understanding of your long-term goals must still guide your property purchase.
Use this incentive wisely and you could turn it into a solid foundation for homeownership or investment success.
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