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When you buy a factory in Malaysia, you pay stamp duty on two documents: the Memorandum of Transfer (MOT), at 1% to 4% of the price on a sliding scale, and the loan agreement, at 0.5% of the loan. Foreign buyers and foreign companies pay a flat 4% on the MOT instead of the scale. For a RM3 million factory bought by a Malaysian company, the MOT duty is RM104,000.
This guide shows how the duty is worked out, gives examples for common factory prices, and lists what is different for foreign buyers, new projects and transfers between your own companies.
Stamp duty rates on the MOT
The MOT is the document that transfers the title from the seller to you. Its stamp duty is charged on the purchase price or the market value, whichever is higher. For Malaysian citizens and Malaysian companies, the rate goes up in bands:
| Part of the price | Rate | Duty on that part |
|---|---|---|
| First RM100,000 | 1% | RM1,000 |
| RM100,001 to RM500,000 | 2% | RM8,000 |
| RM500,001 to RM1,000,000 | 3% | RM15,000 |
| Above RM1,000,000 | 4% | 4% of the amount above RM1 million |
So the first RM1 million of any factory always costs RM24,000 in duty, and every ringgit above that is charged at 4%.
Worked examples
| Factory price | MOT duty (Malaysian buyer) | MOT duty (foreign buyer, 4%) |
|---|---|---|
| RM1,500,000 | RM44,000 | RM60,000 |
| RM3,000,000 | RM104,000 | RM120,000 |
| RM5,000,000 | RM184,000 | RM200,000 |
| RM10,000,000 | RM384,000 | RM400,000 |
How the RM3,000,000 example works: RM1,000 + RM8,000 + RM15,000 for the first RM1 million, plus 4% of RM2,000,000 (RM80,000), which makes RM104,000. On a large factory, the difference between a Malaysian and a foreign buyer is small, because most of the price is already charged at 4%.
👉 The duty is charged on the higher of the price and the market value. If you buy below market value, for example from a related party, expect the duty to be based on the valuation.
Stamp duty on the loan agreement
If you take a bank loan, the loan agreement is stamped at 0.5% of the loan amount. For a RM3,000,000 factory with an 80% loan of RM2,400,000, this is RM12,000. The SPA itself only needs a nominal stamp of RM10.
Total stamp duty for a RM3 million factory
| Item | Malaysian company | Foreign company |
|---|---|---|
| MOT | RM104,000 | RM120,000 |
| Loan agreement (80% loan / 60% loan) | RM12,000 | RM9,000 |
| Total stamp duty | RM116,000 | RM129,000 |
The foreign example assumes a smaller 60% loan, which is more typical for foreign buyers. Foreign buyers in Johor also pay a state approval levy of 4% for industrial property, which is a separate fee; see can foreigners buy a factory in Johor.
Does the 8% rate for foreigners apply to factories?
No. From 1 January 2026, the stamp duty for foreign buyers was raised from 4% to 8%, but this applies to residential property only, according to law firm Skrine. Factories, warehouses and industrial land are still charged at a flat 4% for foreign buyers.
Buying from a developer
For a new factory in a project where the individual title is not issued yet, the duty is charged on the Deed of Assignment instead of the MOT, using the same rates. When the title is issued later, the MOT is stamped at a nominal amount because the duty has already been paid. Developer promotions sometimes include free legal fees for the SPA and loan, but the stamp duty is still paid by the buyer unless the offer says otherwise. See our new factory projects in Johor.
Transfers between your own companies
If you move a factory from your personal name into your company, or between companies in the same group, the full duty usually applies. The Stamp Act has a relief for transfers between associated companies (90% common shareholding and other conditions), and it must be applied for before the transfer. Your lawyer will advise whether your case qualifies.
Who pays and when
- The buyer pays the stamp duty on the MOT and the loan agreement, unless the SPA says otherwise.
- The MOT must be stamped within 30 days of signing, or a late penalty applies. Your lawyer stamps it through the LHDN online system.
- Budget the duty in cash. Banks usually do not finance it, although some will add legal costs to the loan.
Other costs to budget for
Stamp duty is the biggest cost after the price, but not the only one. Add legal fees for the SPA and loan (set by the Solicitors’ Remuneration Order scale), valuation fees, and for foreign buyers the state approval levy. Our step-by-step guide on how to buy a factory in Johor covers the whole process and timeline.
Frequently asked questions
Is stamp duty on a factory tax deductible?
No. Stamp duty on a purchase is part of the cost of the property. It is not an expense you can deduct from income tax, but it is added to your cost when you work out RPGT on a future sale. See our guide to RPGT when selling a factory.
Is there a stamp duty exemption for factories?
The well-known exemptions for first-time home buyers do not apply to factories. Exemptions for industrial property are limited to special cases such as approved restructuring between related companies or specific incentive projects, so ask your lawyer before you assume one applies.
How much is stamp duty on a RM2 million factory?
RM64,000 for a Malaysian buyer (RM24,000 on the first RM1 million plus 4% of RM1,000,000), and RM80,000 for a foreign buyer at a flat 4%.
To see what is available now, browse our factories for sale in Johor, or contact Jimmy Toh for help with a shortlist and viewings.
This article is general information, not legal or tax advice. Rates and rules change, so please confirm the details with your lawyer or tax agent before you sign.
