14th October 2026 - 4 min read
Budget 2027 has savings for middle-income households (M40), including those who don’t receive Sumbangan Tunai Rahmah (STR). You’ll pay less income tax and get RM200 in SARA MADANI. If you buy a first home priced from RM500,001 to RM750,000, you’ll also get a bigger stamp duty exemption. If your chargeable income is between RM50,000 and RM100,000, the tax changes alone could save you RM180 to RM840 a year.
The examples below use your chargeable income, which is what’s left of your yearly income after your tax reliefs.
Individual relief goes up from RM9,000 to RM12,000, its first increase since 2010. Every taxpayer gets this relief automatically, with no receipts needed. The tax rate also drops by one percentage point for two income bands. Chargeable income from RM70,001 to RM100,000 will be taxed at 18% instead of 19%, and income from RM100,001 to RM150,000 at 24% instead of 25%.
If your chargeable income is above RM70,000, you get the higher relief and the lower rate. The table shows how much less tax you’d pay at a few income levels, based on our own calculation using the current and new rates.
| Your Chargeable Income Today | Tax You Pay Today | Tax You’d Save A Year |
| RM50,000 | RM1,500 | RM180 |
| RM60,000 | RM2,600 | RM330 |
| RM80,000 | RM5,600 | RM640 |
| RM100,000 | RM9,400 | RM840 |
We took RM3,000 off each chargeable income and applied the new rates, before any rebates or zakat. The changes apply from the year of assessment 2027, so you’ll see them when you file in 2028 for your 2027 income. When you file in 2027 for this year’s income, you’ll still get RM9,000 in individual relief.
If you’re 18 or older and don’t receive STR, you’ll get RM100 in SARA MADANI twice in 2027. The first payment comes before Aidilfitri and the second to mark the 70th National Day. Up to 13 million people are expected to get it. You can spend SARA on essentials at participating shops, and there are 15,000 of them, including small grocers and cooperatives.
First-time buyers who are Malaysian citizens already pay no stamp duty on homes up to RM500,000. Budget 2027 adds a stamp duty exemption for first homes priced from RM500,001 to RM750,000. It applies to sale and purchase agreements (SPAs) signed from 1 January 2027 to 31 December 2030. On these homes, the first RM500,000 is fully exempt and you pay half the usual duty on the rest.
The exemption covers your transfer document (memorandum of transfer, or MOT) and your loan agreement. MOT duty is 1% on the first RM100,000 of the price, 2% on the next RM400,000 and 3% from RM500,001 to RM1 million. The table shows the MOT duty at a few home prices, based on our own calculation.
| Home Price | MOT Duty For A First-Time Buyer Today | MOT Duty Under Budget 2027 |
| RM600,000 | RM12,000 | RM1,500 |
| RM700,000 | RM15,000 | RM3,000 |
| RM750,000 | RM16,500 | RM3,750 |
On a RM700,000 home, that’s RM12,000 you won’t have to pay. Your loan agreement is charged separately at 0.5% of the loan, which comes to RM3,150 on a 90% loan for the same home. The exemption covers the loan agreement on the same terms, so part of this should be exempt too. It isn’t clear yet how much, because the exemption is worked out on the house price and the duty is charged on the loan. We’ll update this piece when LHDN publishes the exemption order.
Say you earn RM80,000 in chargeable income and buy a RM700,000 first home in 2027. You’d get RM200 in SARA MADANI and pay RM12,000 less MOT duty, both one-off savings in 2027. From your 2028 filing, you’d also pay RM640 less tax every year, as long as your income stays the same.
If you and your partner each have RM60,000 in chargeable income and aren’t buying a home, you’d pay RM660 less tax a year between you. You’d also get RM400 in SARA MADANI between you in 2027.
If you’re buying a first home priced from RM500,001 to RM750,000, check when your SPA is due to be signed. If it’s in November or December 2026, ask the developer or seller whether it can be signed in January instead. Ask what the wait would cost you too, such as the booking fee terms or a later completion date. On a RM700,000 home, waiting until January could save you RM12,000 in MOT duty. You can use the time to compare home loans so your financing is ready when you sign.
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Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.
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