Renting a Shoplot or Office in Malaysia: Tenancy Terms, Stamp Duty and SST

In short: a shoplot or office tenancy is a business contract, and almost every term in it can be negotiated. Two costs, however, are set by law: stamp duty on the tenancy agreement, and service tax (SST) on the rent if your landlord is registered. Check the clauses below, budget for both costs and get the agreement stamped on time.

Tenancy or lease?

Under the National Land Code, renting for three years or less is a tenancy. It is exempt from registration and can even be oral, though a written agreement is strongly advised. A term of more than three years is a lease, which should be executed in Form 15A and registered at the land office. This is one reason many shoplot and office tenancies are written as, for example, a two- or three-year term with an option to renew. Note that an unregistered tenancy does not automatically bind a later buyer or bank of the property unless it is endorsed on the title, so ask your lawyer about this for premises you plan to occupy long term.

Key clauses to check before signing

• Permitted use: your business must suit the land title condition and the building's approved use, and you will need a business premises licence from the local council (PBT). Confirm with the council before you pay any deposit.
• Term and renewal: how long the option to renew is, how much notice you must give, and how the new rent is set (a fixed increase or market rate).
• Rent and deposits: there is no fixed legal amount for security or utility deposits, so they are negotiable. State when they are refunded and what may be deducted.
• Rent-free or fit-out period: time to renovate before rent starts, if agreed.
• Repairs and outgoings: who fixes the roof, structure, wiring and air-conditioning, and who pays quit rent, assessment and, for strata units, maintenance charges and sinking fund.
• Exit terms: early termination, subletting or assignment, and how the unit must be reinstated when you move out.
• Insurance: what the landlord insures and what you must insure, such as your contents and public liability.

Stamp duty on the tenancy agreement

Since 1 January 2025 (Finance Act 2024), stamp duty on a tenancy or lease is charged on every RM250, or part of RM250, of the annual rent. The old exemption on the first RM2,400 of annual rent was removed.

• Term up to 1 year: RM1 per RM250
• More than 1 year up to 3 years: RM3 per RM250
• More than 3 years up to 5 years: RM5 per RM250
• More than 5 years or no fixed term: RM7 per RM250

The minimum duty is RM10, and each duplicate copy costs RM10. By law the tenant pays duty on the original and the landlord on the duplicate, but the parties may agree otherwise in the agreement.

Example: a shoplot at RM6,000 a month has an annual rent of RM72,000, which is 288 units of RM250. A one-year tenancy costs RM288, a two- or three-year tenancy costs RM864, and a five-year lease costs RM1,440.

The agreement must be stamped within 30 days of signing. From 1 January 2026, tenancy stamp duty is self-assessed: you or your lawyer upload the agreement, work out the duty and pay through e-Duti Setem on MyTax, and LHDN may review it later. Late stamping costs RM50 or 10% of the duty, whichever is higher, if stamped within three months after the deadline, and RM100 or 20% after that. An unstamped agreement also cannot be relied on as evidence in court until the duty and penalty are paid.

Service tax (SST) on commercial rent

From 1 July 2025, rental and leasing services became subject to service tax. The key points:

• The landlord must register with Customs if its taxable rental income exceeds RM1 million in 12 months. A small owner renting out one shoplot is usually below this, while larger landlords may charge SST.
• The rate is 6% from 1 January 2026 (it was 8% from July to December 2025). For RM6,000 rent, that adds RM360 a month.
• Homes rented for living are not covered.
• Refundable security deposits are not taxed.
• SME tenants with annual sales of up to RM1.5 million are exempt if they register and declare in Customs' MyPMK system. New SMEs are exempt for their first year from SSM registration.

Practical tips

• Check the title and confirm that the person signing is the owner, or that a main tenant is allowed to sublet.
• Ask the landlord whether it is SST-registered, and state in the agreement whether the rent includes SST.
• Write down who pays stamp duty and legal fees.
• Tax rules can change with each Budget, so confirm the latest position with LHDN, Customs or your lawyer before signing.

Looking for a shoplot or office to rent? Chat with PropertyMsia on WhatsApp and we will help you compare units and understand the costs before you sign.