LBS Happenings
Property Terms Glossary: Memorandum of Transfer

Posted in Happenings October 9, 2020


What is a Memorandum of Transfer (MOT)?

A Memorandum of Transfer (MOT) is a transfer of ownership procedure of a property for the price agreed between the buyer and seller. It is used to transfer ownership of the property from the developer to buyer, or in the case of secondary market purchases, transfer ownership of the property from the seller to buyer. The property can be transferred to a family, boyfriend, girlfriend, friend or any stranger. The cost of a MOT borne by the buyer will include professional legal fees, stamp duty, disbursement fees as well as sales and service tax.

___________________________________________________________________________________

Components of a MOT

  1. Company letterhead
  2. List of parties involved in the transfer of property
  3. Description of and valuation of items in the transfer

______________________________________________________________________________

Documents needed prior to transfer of property

  1. a) Copies of all present and previous SPAs
  2. b) Copies of present and previous Loan Agreement, Deed of Assignment, Deed of Receipt

and Re-assignment (if any).

  1. c) Strata Title (from the developer)
  2. d) Current year quit rent receipt
  3. e) Current year assessment receipt
  4. f) Facility Agreement

______________________________________________________________________________

  Stamp duty charge on the MOT

House Price

Stamp Duty Charge

First RM100, 000

1%

For the first RM100,0001 to RM500,000 

2%

From RM500,001 to RM1 million

3%

Subsequent amount

4%

Stamp duty waived: Between husband and wife by way of love and affection

Transferor

Transferee

Exemption Rate

Husband/Wife

Wife/Husband

100%

Parent/Child

Child/Parent

50%

Stamp duty exemptions

First-time homebuyers will be exempted from stamp duty on the first RM300,000 of the property price on any instrument of transfer and the loan agreement, for SPA completed between 1 January 2019 and 31 December 2020.

Process developer and buyer will sign the MOT (Form 14A) which indicates who is the owner and who is the transferor, transferee, and how much shares the transferor wants to transfer.

 

 

 

 

 

 

 

Conversation between Preeta and Adam (developer’s agent) discussing about a property transaction worth RM400, 000. Adam is finalising the MOT with the developer.

 

Adam: Hi Preeta, are all the documents in order for us to finalise the MOT?

Preeta: Yes, I have all the relevant documents ready.

Adam: I will calculate the stamp duty for the MOT.

The first RM100,000, stamp duty is 1%

RM100,000 x1% = RM1,000

From RM100,001 to RM500,000, stamp duty is 2%

RM400,000 x 2 = RM8000. So, the total Stamp Duty that I need to pay is RM9,000

Preeta: Let’s sign this MOT and complete the transaction and the property will be transferred to your

name officially.

 

Leave a Reply

Your email address will not be published. Required fields are marked *