What is MOT Property and Why the Memorandum of Transfer is Essential

If you’re buying a house or any form of property in Malaysia, understanding the Memorandum of Transfer (MOT) is absolutely crucial. Many first-time homebuyers believe that signing a Sale and Purchase Agreement (SPA) means ownership is transferred but in reality, ownership is not legally transferred until the MOT is executed and registered.

Without MOT, even if you have paid in full and moved into the property, your name will not appear on the title deed, and legally, you are not recognised as the owner.

We’ll explain everything Malaysian homebuyers need to know about MOT, including its function, process, costs, and implications. We’ll also explore how it connects with other property documents like the Sale and Purchase Agreement (SPA) and title ownership (Geran). This article will guide you through:

• What is the Memorandum of Transfer?
• The role it plays in Malaysian property law
• Why MOT is critical for legal ownership
• How the MOT process works
• The costs involved, including updated 2025 stamp duty rates
• Key differences between individual titles and strata titles
• Common legal risks and how to avoid them

Whether you're buying a landed property, a high-rise condominium, or investing in real estate, this guide provides all the information you need to confidently handle the MOT process in Malaysia.

What is MOT in Property?

MOT stands for Memorandum of Transfer, a legal document used to transfer ownership of property from the seller (transferor) to the buyer (transferee). It must be signed by both parties and registered at the relevant Land Office to make the transfer official under Malaysian law.

In Simple Terms:

• SPA confirms you’re buying the house.
• MOT proves the house is legally yours in the government’s eyes.

Until the MOT is signed, stamped, and registered, your name will not appear as the registered property owner on the land title (Geran Hak Milik).

Why Is MOT Important in Malaysian Property Transactions?

1. Legal Proof of Ownership: Only with a completed MOT will your name be recorded as the legal owner under the National Land Code 1965 (for West Malaysia), Sabah Land Ordinance, or Sarawak Land Code, depending on where the property is located.
2. Required by Law: Under the National Land Code 1965, the MOT is a mandatory document for the transfer of real property. No transaction is considered legally complete until the MOT is executed and registered.
3. Buyer Protection: A registered MOT protects the buyer from future disputes, fraud, or complications with refinancing, selling, or inheritance of the property.
4. Mortgage and Bank Loan Requirement: Banks usually require proof that the property is legally transferred to the buyer via MOT before approving any refinancing, sub-sale, or further financing.
5. Government Records and Tax Compliance: Once the MOT is registered, the buyer becomes responsible for quit rent (cukai tanah) and assessment tax (cukai pintu), and these obligations are linked to the official land registry.

The National Land Code 1965

The MOT process is governed under the National Land Code 1965, which sets the procedures and legal requirements for land ownership, transfer, lease, and registration in Peninsular Malaysia.

For Sabah and Sarawak, similar procedures exist under the Sabah Land Ordinance and Sarawak Land Code, respectively, though with different administrative bodies.

MOT vs Sale and Purchase Agreement (SPA)

Many buyers mistakenly believe that once they sign the SPA, they already own the property. This is incorrect.

SPA is a contractual agreement between buyer and seller. MOT is the legal instrument used to update the ownership record at the Land Office.

Only after MOT is registered does the buyer legally own the property in the eyes of Malaysian law.

Key Parties Involved in MOT

• Buyer (Transferee): The new legal owner once MOT is registered.
• Seller (Transferor): The current registered owner on the land title.
• Property Lawyer: Usually appointed by the buyer to manage documentation, stamping, and registration.
• Inland Revenue Board (LHDN): For stamping and calculation of stamp duty.
• State Land Office: For title registration and issuance of the new grant/title.

When Does the MOT Happen?

Typically, the MOT process takes place:

• After signing the Sale and Purchase Agreement (SPA).
• After the full payment has been made to the seller.
• Once the title (individual or strata) is ready.

If the property is under a Master Title (common in new developments), the MOT can only be executed after separate titles are issued by the Land Office — this can take months or even years.

Step-by-Step MOT Process in Malaysia

1. Signing of SPA: Formal agreement between buyer and seller.
2. Fulfilment of Conditions: Full purchase price is paid. State authority consent is obtained (for leasehold and bumi lots). Outstanding quit rent and assessment tax are settled.
3. Lawyer Prepares MOT: Most buyers appoint a lawyer or conveyancing firm to handle the MOT process. They’ll prepare the paperwork, calculate stamp duty, and liaise with the Land Office.
4. MOT Signing: Form 14A is the actual Memorandum of Transfer form under the National Land Code. It includes details of the buyer, seller, property title, and agreed price. Both parties must sign before a witness (often the conveyancing lawyer).
5. Stamp Duty Assessment by LHDN: Lawyer submits the MOT to the Inland Revenue Board (LHDN) for adjudication.
6. Stamp Duty Payment: The buyer pays stamp duty to LHDN based on the property’s purchase price or market value (whichever is higher). Exemptions or discounts may apply.
7. Submission to Land Office: Once stamped, the MOT is submitted to the Land Office or PTG (Pejabat Tanah dan Galian) for registration. Upon successful registration, the title is endorsed with the new owner’s name.
8. Title Updated: New owner’s name appears on the land or strata title once approved.

MOT Stamp Duty Rates in Malaysia

Stamp duty, also called transfer duty, is payable upon registration of the MOT.

Property Value Tier	Stamp Duty Rate
First RM100,000	1%
RM100,001 to RM500,000	2%
RM500,001 to RM1,000,000	3%
Above RM1,000,000	4%

Sample Calculation (RM850,000 property):

• First RM100,000 @ 1% = RM1,000
• Next RM400,000 @ 2% = RM8,000
• Remaining RM350,000 @ 3% = RM10,500
• Total Stamp Duty = RM19,500

Stamp Duty Exemptions (As of 2025):

Some buyers may qualify for partial or full exemptions under government initiatives.

1. First-Time Home Buyers (2025)

Under the Malaysia MADANI housing initiatives, eligible first-time buyers enjoy stamp duty exemptions on MOT:

• 100% exemption on homes below RM500,000
• 50% exemption on homes priced RM500,001 – RM1 million

2. Transfer Between Family Members

If the transfer is between parents and children or husband and wife, special exemptions apply:

• Full exemption on stamp duty (subject to relationship verification and declaration)

3. Affordable Housing Schemes (PR1MA, RUMAWIP, etc.)

Buyers under government housing programs may also enjoy full or partial exemptions on MOT and loan agreement stamp duty.

Exemption conditions may vary. Always confirm with LHDN or your lawyer.

Title Types and MOT

Individual Title: Common in landed property (e.g., terrace house, bungalow). Title is issued under one name. MOT can be registered immediately after full payment.

Strata Title: Common for condominiums, apartments, flats. If strata title is not ready, buyer uses Deed of Assignment (DOA). Once the title is issued by the developer, MOT is registered.

Costs Involved in MOT Registration (Estimated 2025)

Cost Component	Estimated Range
Stamp Duty	Based on property value (see table)
Legal Fees	Around 0.4% to 1% of property price
Land Office Registration	RM100 to RM300+ (varies by state)
Disbursement Fees	RM500 to RM1,500
Title Search & Admin Fees	RM100 to RM200

Buyers should always request a full quotation from their lawyer to avoid hidden costs.

Additional Costs Beyond Stamp Duty

Besides the stamp duty, buyers must also pay:

1. Legal fees for preparing Form 14A and attending to the MOT process.
2. Disbursements (e.g. registration fees, land search fees, adjudication costs)
3. Title transfer fee charged by the Land Office.

MOT and Inheritance in Malaysia

In the event of death, a registered MOT ensures that the property can be passed on to legal heirs through a clear title. If MOT is not registered, the deceased's name remains on the title, causing delays in probate or letters of administration.

MOT and Property Investment

For investors, registering the MOT is crucial to:

• Establish ownership for legal rental contracts
• Access refinance or cash-out options
• Avoid issues during future resale or transfer to company/SPV

Failure to register MOT can reduce the liquidity and value of your investment.

Common Mistakes to Avoid

• Not registering MOT after completing payment
• Delaying stamp duty payment (may incur penalties)
• Assuming SPA is enough for legal ownership
• Ignoring MOT when title has not been issued (for new projects)
• Using unqualified or unlicensed lawyers

FAQ of MOT

How Long Does the MOT Process Take?

On average, the full MOT process in Malaysia takes between 3 to 6 months depending on:

• Type of title (strata titles often take longer)
• Whether consent is needed
• Efficiency of the Land Office and LHDN
• Whether any back taxes (quit rent, assessment tax) are unpaid

In some cases (e.g. leasehold with state consent), it may take up to 9–12 months.

Can You Own a Property Without MOT?

No. In Malaysia, you cannot claim legal ownership of a property without a registered MOT. The SPA or proof of payment is not sufficient.

Without MOT:

• You cannot refinance the property
• You cannot sell the property officially
• The property may not be transferred to heirs smoothly
• You may face legal disputes in the future

What Happens If You Don't Register the MOT?

Failing to register the MOT can lead to several issues:

• You cannot legally sell the property later.
• The previous owner may still appear on the title and be held accountable.
• You may face legal disputes over ownership.
• Banks may not approve refinancing or loan restructuring.

Some buyers delay MOT registration to avoid paying stamp duty immediately. While technically allowed, this is extremely risky and strongly discouraged.

Can MOT Be Done Online?

As of 2025, e-Tanah systems are being rolled out in several states, including Selangor, Kuala Lumpur, and Penang, allowing partial online submissions. However, the MOT form must still be physically signed and registered at the Land Office.

For properties in Sabah and Sarawak, local land ordinances apply and may differ from Peninsular Malaysia. It's crucial to engage a lawyer familiar with state-specific processes.

 

The Memorandum of Transfer (MOT) is one of the most important documents in any property transaction in Malaysia. It serves as the only legal method of transferring property ownership from the seller to the buyer.

Every buyer, whether first-time homeowner or experienced investor must ensure that the MOT is properly:

• Prepared by a qualified lawyer
• Stamped with the correct duty at LHDN
• Registered at the Land Office

Failing to complete the MOT process could lead to:

• Ownership disputes
• Inheritance complications
• Inability to sell, refinance, or lease the property

Do not skip or delay the MOT. It is the final and most critical step in becoming a legal property owner in Malaysia.

Other Article:

• Stamp Duty Exemption for First-Time Homebuyers until 2025
• Standardised Base Rate (SBR): How It Impacts Your Loans
• DSR Calculation: How to Calculate Debt Service Ratio (DSR) in Malaysia