On a Malaysian factory sale, the buyer pays transfer stamp duty (1% to 4% in tiers, or a flat 4% for a foreign buyer), 0.5% on a loan, and its lawyers' fees plus 8% service tax. It holds back 3%, 5% or 7% of the price for the seller's real property gains tax (RPGT) and pays it to LHDN within 60 days. The seller pays its lawyer and RPGT (30% to 10% for a company incorporated in Malaysia).
Who pays what when a factory is sold in Malaysia?
In a Malaysian factory sale, the buyer pays the stamp duty and holds back part of the price for the seller's real property gains tax (RPGT); each side pays its own lawyer.
The buyer pays
- Stamp duty on the transfer
- 1% to 4% in tiers; a flat 4% for a foreign buyer.
- Stamp duty on the loan
- 0.5% of the amount secured; less for an SME.
- Lawyers
- Its purchase lawyer, plus the loan lawyer if the bank's terms say so; 8% service tax on both.
- RPGT retention
- 3%, 5% or 7% of the price, paid to the Inland Revenue Board (LHDN, also HASiL) within 60 days.
The seller pays
- Lawyer
- Its own, on the same scale, plus 8% service tax.
- RPGT
- On the gain: 30% falling to 10% for a Malaysian-incorporated company.
- RPGT return
- On e-CKHT within 60 days of the date of disposal; any balance within 90.
How much stamp duty is charged on a factory transfer?
Stamp duty on a factory, warehouse or industrial-land transfer in Malaysia is 1% to 4% in tiers, on the price or market value, whichever is higher: RM104,000 on a RM3 million factory.
Stamp duty on a RM3 million factory, band by band (illustration)
| Part of the price | Rate | Duty |
|---|---|---|
| First RM100,000 | 1% | RM1,000 |
| Next RM400,000 | 2% | RM8,000 |
| Next RM500,000 | 3% | RM15,000 |
| Above RM1 million | 4% | RM80,000 |
Stamp duty by price (illustration)
| Price | Tiered rates | Foreign buyer, flat 4% |
|---|---|---|
| RM1 million | RM24,000 | RM40,000 |
| RM2 million | RM64,000 | RM80,000 |
| RM3 million | RM104,000 | RM120,000 |
| RM5 million | RM184,000 | RM200,000 |
| RM10 million | RM384,000 | RM400,000 |
Non-residential property sold to a foreign company or a non-citizen who is not a PR (item 32(aa), from 2024).
The sale and purchase agreement (SPA) is generally stamped at RM10; the 1% to 4% falls on the transfer (Memorandum of Transfer or Form 14A).
“‘residential property’ means a house, condominium, apartment, flat, service apartment or small office home office solely to be used as a dwelling house”
Read the Act on lom.agc.gov.my
When and how is a factory transfer stamped?
A factory transfer must be stamped within 30 days of signing, on e-Duti Setem (e-Stamp Duty) in MyTax; in 2026 LHDN still assesses property transfers before payment.
- Sign the transferThe 30 days start that day.
- File the BNDS onlineThe stamp duty declaration form, on e-Duti Setem.
- LHDN assessesTransfers stay on formal assessment in 2026.
- Pay within 30 daysPay within 30 days of LHDN's notice of assessment, by FPX or bill payment.
Stamped late Within three months of the deadline: RM50 or 10% of the unpaid duty, whichever is higher; after that, RM100 or 20% (section 47A, from 2025).
Photo for illustration purposes onlyComing next From 1 January 2027, transfers with no valuation by the Valuation and Property Services Department (JPPH) move to self-assessment, the rest in 2028. Budget 2027 (9 October 2026) proposes stamp duty relief for first homes; we found none for factories.
What stamp duty and fees come with the factory loan agreement?
A factory loan pays 0.5% stamp duty on its principal security document (the loan agreement or charge), and its lawyer charges the purchase lawyer's scale.
RM5 per RM1,000 (item 27(a)(iii)), paid by the borrower; extra security documents at most RM10 each.
An SME (manufacturing: sales up to RM50 million or up to 200 full-time staff) pays 0.05% on its first RM250,000 of loans in a calendar year, 0.25% up to RM1 million, then 0.5% (item 27(a)(i)).
Since 1 January 2026, loan security documents and tenancies are filed within 30 days of signing and paid within 30 days of filing, with no LHDN notice; only the transfer still waits for one.
The same scale on the amount financed; each subsidiary document adds 10% of that fee (RM500 to RM2,000).
Margins, tenures and documents: see our factory loan guide.
How much are the lawyers' fees on a factory sale?
Lawyers' fees on a Malaysian factory sale are set by the Solicitors' Remuneration Order 2023: 1.25% of the first RM500,000 and 1% of the next RM7 million, for each side's lawyer.
One side's lawyer on a RM3 million sale
- A lawyer may discount the scale fee by up to 25%.
- Not in the fee: itemised disbursements (stamp duty, registration, searches) and 8% service tax (since 1 March 2024).
How much RPGT does the seller pay on a factory?
RPGT on a factory sale is a share of the gain that falls with the years held: a Malaysian-incorporated company pays 30% within three years and 10% from the sixth.
RPGT as a share of the gain, by years held
| Seller | Years 1–3 | Year 4 | Year 5 | Year 6 on |
|---|---|---|---|---|
| Company incorporated in Malaysia | 30% | 20% | 15% | 10% |
| Citizen or permanent resident | 30% | 20% | 15% | 0% |
| Company incorporated abroad, or non-citizen (not a PR) | 30% | 30% | 30% | 10% |
- The gain is the sale price less the purchase price, after incidental costs of buying and selling.
- Years held run from the SPA you bought under to the SPA you sell under. Where either deal needed State consent, that end counts from the day consent was given (Schedule 2, paragraphs 15 and 16).
- Associated or group companies may get stamp duty relief (sections 15 and 15A) and, with LHDN's prior approval, RPGT relief on a transfer paid mainly in shares, or under a reorganisation, to a Malaysian-resident company (Schedule 2, paragraph 17).
What must the buyer hold back for RPGT, and by when?
A factory buyer holds back 3% of the price for RPGT (5% if a Malaysian-incorporated company sells within three years, 7% if the seller is a company incorporated abroad or a non-citizen who is not a PR) and pays it to LHDN within 60 days.
Share of the price the buyer holds back (from 1 January 2026)
The buyer pays the retention to LHDN within 60 days; any unpaid amount rises by 10%.
Usually the sale agreement's date, not completion. A sale conditional on State consent: the day consent is given, or, if the consent carries conditions, the day the last one is met.
Photo for illustration purposes onlyWhat does it add up to on a RM3 million factory?
With a RM2.4 million loan, a RM3 million factory costs its buyer about RM177,000 in duty and lawyers' fees (our arithmetic, an illustration).
The buyer's costs
The seller's costs (a company incorporated in Malaysia)
Selling a factory? Send Chris its location, size, title and price, or see buyer and tenant requests agents have posted.
WhatsApp ChrisWhat should you check, and who should you ask?
Your lawyer and tax agent work out your own numbers.
- Stamp duty · lawyer The market value LHDN may use, whether the buyer counts as foreign, and any relief.
- RPGT · tax agent The gain, the rate, and the tax notice to the buyer before it pays the retention.
- Filing · LHDN e-Duti Setem and e-CKHT on MyTax; HASiL Contact Centre 603-8911 1000.
- Consent and title · land office Whether the transfer needs State consent: see freehold or leasehold.
- Company sale or machinery · tax agent Selling the company that owns the factory, or machinery and equipment with it, is taxed differently.
Selling? Start with preparing a factory to list. Buying? Take the viewing checklist. After you buy: what a managed park's maintenance fee covers.
Send Chris the size, power, location and budget you need. Agents can post a buyer's requirement.
WhatsApp ChrisSources (21)
- Laws of Malaysia, Stamp Act 1949 (Act 378), updated text as at 1 January 2026, Attorney General's Chambers: section 2 (“residential property”, “small and medium enterprise”), section 47A, First Schedule items 27, 32(a), 32(aa) and 32(ab), Third Schedule: lom.agc.gov.my; LHDN's copy of the reprint before the 2019–2026 amendments (as at 1 July 2014): hasil.gov.my
- LHDN, Garis Panduan Pengenaan Duti Setem bagi Surat Cara yang Tertakluk kepada Jadual Pertama Akta Setem 1949 (guideline on the First Schedule), 30 June 2026: rates under items 32(a), 32(aa) and 32(ab); the Memorandum of Transfer and Form 14A; sale and purchase agreements under general stamping: hasil.gov.my
- Finance (No. 2) Act 2023 (Act 851), Chapter IV, amendments to the Stamp Act 1949 in force 1 January 2024 (new item 32(aa)): copy hosted by ccs-co.com
- Finance Act 2024 (Act 862), gazetted 31 December 2024, Chapter IV (section 47A penalties), in force 1 January 2025: copy hosted by maicsa.org.my
- Finance Act 2025 (Act 874), gazetted 31 December 2025: Chapter III (Real Property Gains Tax Act 1976, section 21B retention) and Chapter IV (Stamp Act 1949, item 32(ab) and “residential property”; item 32(a) left unchanged), in force 1 January 2026: copy of the Act; lawplayer.com
- ACCA, “Stamp duty” (Malaysia), ATX-MYS technical article, laws in force at 31 March 2023 (item 32(a) rates; the transferee pays): accaglobal.com
- Chia Swee Yik, Chia, Lee & Associates, “Property Law in Malaysia: Stamp Duty for Transfer of Property” (rates from 1 January 2019): chialee.com.my
- LHDN, Stamp Duty FAQ: applying for stamping via e-Stamp Duty and STSDS, updated 31 December 2025: hasil.gov.my
- LHDN, Stamp Duty Self-Assessment System (STSDS), updated 28 August 2026: hasil.gov.my
- LHDN, Penalty (Stamp Duty), updated 13 May 2026: hasil.gov.my
- LHDN, Relief from Stamp Duty (sections 15 and 15A), updated 21 July 2026: hasil.gov.my
- Valuation and Property Services Department (JPPH), “Stamp Duty”, last updated 21 July 2026: jpph.gov.my
- Solicitors' Remuneration Order 2023, P.U. (A) 207/2023, in force 15 July 2023, published with Bar Council Circular No 185/2023, 13 July 2023: malaysianbar.org.my
- Service Tax (Rate of Tax) (Amendment) Order 2024, P.U. (A) 64/2024, in force 1 March 2024: mysst.customs.gov.my; KPMG Malaysia, “Proposed increase in service tax rate and expansion of taxable services”, January 2024 (legal services at 8%): kpmg.com; KPMG Malaysia, “6 percent service tax rate for rental or leasing services”, March 2026: kpmg.com
- Laws of Malaysia, Real Property Gains Tax Act 1976 (Act 169), updated text as at 1 January 2026, Attorney General's Chambers: section 21B (retention), Schedule 2 paragraphs 15, 16 and 17 (dates of disposal and acquisition, conditional contracts, transfers within a group), Schedule 5 (rates): lom.agc.gov.my
- LHDN, Real Property Gains Tax (RPGT) Rates, updated 23 June 2026: hasil.gov.my
- LHDN, Determination of Chargeable Gain / Allowable Loss, updated 22 June 2026: hasil.gov.my; and Disposal Date and Acquisition Date, updated 18 May 2026: hasil.gov.my
- LHDN, Retention and Remittance by Acquirer, updated 25 May 2026: hasil.gov.my
- LHDN, Introduction to the CKHT Self-Assessment System, updated 22 June 2026: hasil.gov.my; and Procedures for Submission of Real Property Gains Tax Form, updated 22 June 2026: hasil.gov.my
- RHB Bank, Product Disclosure Sheet, RHB SME Green Commercial Property Financing, updated 30 January 2026: rhbgroup.com
- The Star, “Budget 2027: Govt proposes stamp duty exemptions for first-time homebuyers”, 9 October 2026: thestar.com.my; The Edge Malaysia, “Highlights of Budget 2027”: theedgemalaysia.com
Common questions
How much stamp duty is payable on a RM3 million factory in Malaysia?
On the tiered scale in item 32(a) of the First Schedule to the Stamp Act 1949: 1% on the first RM100,000, 2% on the next RM400,000, 3% on the next RM500,000 and 4% above RM1 million, charged on the price or the market value, whichever is greater. On RM3 million that is RM104,000. A foreign company, or a non-citizen who is not a permanent resident, pays a flat 4%: RM120,000.
Who pays stamp duty when a factory is sold?
The Third Schedule of the Stamp Act 1949 names the person liable. For a conveyance, assignment or transfer it is the grantee or transferee, that is, the buyer. For a charge or mortgage securing a loan it is the chargor, mortgagor or obligor. For a lease it is the lessee. Instruments must be stamped within 30 days of signing.
Does the 8% foreign buyer stamp duty apply to factories?
No. From 1 January 2026 the Finance Act 2025 charges 8% only on residential property sold to a foreign company or to a non-citizen who is not a permanent resident; the Stamp Act defines residential property as a house, condominium, apartment, flat, service apartment or SOHO used solely as a dwelling. Other property sold to those buyers, such as a factory, stays at a flat 4% under item 32(aa).
How much are legal fees for buying a factory in Malaysia?
Under the Solicitors' Remuneration Order 2023, a lawyer acting for the buyer or the seller charges 1.25% of the first RM500,000 (minimum RM500) and 1% of the next RM7 million; above RM7.5 million the fee is negotiated, capped at 1%. Loan documents follow the same scale on the amount financed. A discount of up to 25% is allowed, and 8% service tax and disbursements are added.
What RPGT does a company pay when it sells a factory?
LHDN's rates for a company incorporated in Malaysia are 30% of the chargeable gain on a disposal within three years of acquisition, 20% in the fourth year, 15% in the fifth and 10% from the sixth year. A citizen or permanent resident pays 0% from the sixth year; a company incorporated abroad, or a non-citizen who is not a permanent resident, pays 30% for the first five years, then 10%.
How much must a factory buyer retain for RPGT?
Under the Finance Act 2025 (RPGT Act section 21B), from 1 January 2026 the buyer retains 3% of the price; 5% if a company incorporated in Malaysia sells within three years of acquiring; 7% if the seller is a company incorporated abroad or a non-citizen who is not a PR. If the seller notifies a lower tax before the buyer pays, the buyer retains that instead. It pays LHDN within 60 days of disposal.