Budget 2026 Stamp Duty Exemption Extended to 2027: What First-Time Buyers Under RM500,000 Actually Save

When Prime Minister and Finance Minister Anwar Ibrahim tabled Budget 2026 on 10 October 2025, one of the housing measures carried over rather than introduced fresh was the full stamp duty exemption for first-time homebuyers. The exemption, which covers residential properties priced up to RM500,000, was due to lapse and has instead been extended by two years, to 31 December 2027, giving buyers who have been timing a purchase around the deadline more runway than they had before Budget day.

The exemption applies to two separate charges that a buyer would otherwise pay in full: stamp duty on the instrument of transfer, commonly called the MOT, and stamp duty on the loan agreement used to finance the purchase. Both are waived entirely for an eligible first-time buyer on a property priced at RM500,000 or below, rather than discounted at a lower rate, which is what makes the saving material rather than marginal.

To see what is being waived, it helps to know what a buyer without the exemption would pay. Malaysia's standard MOT stamp duty is tiered: 1% on the first RM100,000 of the property's price or market value, whichever is higher, and 2% on the portion from RM100,001 to RM500,000. On a RM500,000 property that works out to RM1,000 plus RM8,000, a cumulative RM9,000 in transfer duty alone. The loan agreement carries its own flat rate of 0.5% on the amount borrowed, assessed separately from the MOT.

Put a real financing structure behind those rates and the total saving becomes concrete. A first-time buyer purchasing a RM500,000 property with a 90% margin of financing takes a RM450,000 loan. The MOT exemption on that purchase is worth RM9,000, and the loan agreement exemption, at 0.5% of RM450,000, is worth a further RM2,250. Together the two exemptions come to roughly RM11,250 that this buyer does not pay at the point of signing, money that would otherwise be due alongside legal fees before keys change hands.

The saving scales down for cheaper properties rather than staying fixed, since both components are calculated as a percentage of price and loan size. A first-time buyer on a RM300,000 property with a 90% loan of RM270,000 would see roughly RM4,000 in MOT exemption (1% on the first RM100,000 plus 2% on the remaining RM200,000) and about RM1,350 in loan agreement exemption, for a combined saving closer to RM5,350. The exemption is worth the most, in absolute ringgit, to a buyer purchasing as close to the RM500,000 ceiling as the eligibility rules allow.

That ceiling is also a hard cliff rather than a tapering one. A property priced at RM500,001 does not receive a partial exemption; it falls outside this scheme entirely, and the buyer pays MOT and loan agreement duty on the full amount under the standard tiered rates, which climb to 3% on the portion from RM500,001 to RM1,000,000. Buyers negotiating a purchase price close to the threshold have a direct incentive to keep the agreed price at or under RM500,000 where the numbers allow it.

Eligibility sits on top of the price ceiling. The exemption is restricted to Malaysian citizens buying their first residential property, purchasing in their own name or jointly with a co-owner, with no record of prior residential property ownership. The sale and purchase agreement and the loan agreement both need to be executed within the exemption window to qualify, which means a buyer who signs an SPA before the measure's effective start date, or after 31 December 2027, does not benefit even if the property itself is priced within the eligible range.

Budget 2026 paired the stamp duty extension with a separate financing measure aimed at the same group of buyers: the government raised the ceiling on its housing credit guarantee scheme to RM20 billion, up from RM10 billion, a change intended to help first-time buyers who struggle to qualify for a conventional loan, including gig workers and the self-employed, secure financing in the first place. Government figures cited alongside the Budget 2026 announcement put the number of first-time buyers expected to benefit from the enlarged guarantee scheme at 80,000.

For a buyer shopping specifically at or under the RM500,000 mark, the practical takeaway is to confirm the exemption still applies at the point of signing, since the deadline has moved before and could move again, and to ask early whether the sale and purchase agreement and loan agreement can both be executed before the property's effective date cutoff rather than assuming the exemption applies automatically to any purchase under the price ceiling. I help first-time buyers in Kuala Lumpur and Selangor work out whether a specific unit and loan structure actually qualifies for this exemption before they sign anything. Message me the property price and your loan plans and I will work through the numbers with you.