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Land title transfer in Malaysia: Procedures, documents and costs involved

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*This article was updated on 3 July 2022.

A land title transfer is a process where the name or title of a registered property owner is transferred to someone else. This transfer of property happens when it is being sold off to a new owner. There are sets of documents and costs involved to complete the procedure which is done at the Land Office with Form 14A. 

There are a lot of procedures when it comes to transferring land titles in Malaysia. Besides basic information about the parties and properties involved, there are sets of documents that you need to submit to the authorities, as well as the costs you need to bear regardless if you are the vendor (original owner) or the buyer. With that in mind, let’s go through the details of the land transfer procedure in Malaysia.

What is a land title? 

A land title holds details and information about a piece of land or property. It is issued to the legal owner of land or property. The details include the owner’s name, layout and dimension, usage, and status among others.

Different types of land titles in Malaysia 

Each land title in Malaysia has its pros and cons. It is crucial for homeowners and potential buyers to take note of this as might affect your ownership, transfer of ownership, price appreciation, conversion of land and even the marketability of your property.

Freehold

The owner has permanent and absolute ownership for perpetuity. There are no restrictions to the number of owners who can be registered as proprietors. Transfer of ownership or selling of property is more convenient. 

Leasehold 

A leasehold property or land has a tenure of 30, 60, 99 to a maximum of 999 years and goes back to the State Authority once the leasehold expires and owners must apply for an extension. A premium will be charged for an extended lease once the renewal is granted. 

Read about Freehold vs Leasehold title in Malaysia: What property buyers should know for more information. 

Bumiputera Lot (Bumi Lot)

Bumi Lot refers to property or land that can only be purchased and owned by Bumiputeras. Property developers in Malaysia must allocate at least 30% of commercial or residential units to Bumiputeras. A Bumi Lot can be sold to a non-Bumi but the unit will need to be released from its title.

Malay Reserve Land

Malay Reserve Land (MRL) or Tanah Rizab Melayu is a type of land that is often mistaken as Bumi Lot. However, under the Malay Reservation Enactment 1913, MRL can only be owned and held by Malays and non-Malays are not allowed to rent, build properties and operate businesses on MRL. The land CANNOT be charged to a non-Malay individual/corporate entity.

Here’s an in-depth explanation of Bumi Lot and Malay Reserve Land: What you need to know.

How do I transfer a land title in Malaysia?

There are many documents and pieces of information that you will need to transfer a land title in Malaysia.

land title in malaysia
© nizamkem/ 123RF

STEP 1: Engage a lawyer

As a first step, engage a lawyer who knows the process well and will represent you in the process.

STEP 2: Prepare Your Documents

You will need various documents to start the land title transfer procedure. Among the documents that you will need are:

  • The Sales and Purchase Agreement (SPA)that been executed and stamped between you and your vendor/purchaser
  • The previous SPA of the property
  • The executed Memorandum of Transfer(MOT)
  • The quit rent payment receipt of the current year
  • The latest Assessment Tax payment receipt;
  • The original land title
  • Deed of Assignment (in cases where the land title has not yet been issued to the Vendor)

Now let’s take a closer look at some of the documents:

The new SPA

The SPA is an agreement where it sets out the terms and conditions of the sale that shall be executed between the vendor and the purchaser. It is a common practice for the vendor’s lawyer to prepare the SPA. This is usual as the vendor’s lawyer has all the information about the property. However, if both parties agree, the purchaser’s lawyer may also prepare the agreement, in which case the particulars of the property should be made available to the purchaser’s lawyer.

Memorandum of Transfer (Form 14A)

One of the most important forms you need to fill up is the Memorandum of Transfer (MOT), also known as Form 14A. It is a form to register the title in the purchaser’s name at the Land Office. The MOT is prescribed under the NLC 1965 to affect the registration of transfer of ownership where the title is available, and it will be prepared by the purchaser’s lawyer. Both parties will need to sign this document to proceed with the transfer of title from the vendor to the purchaser.

Deed of Assignment

A Deed of Assignment is prepared when no title is issued for the property. It functions to transfer all the rights of the vendor to other to the purchaser. If a Vendor has entered into a financing agreement with a bank and has an existing Deed of Assignment for the benefit of the bank, the vendor will need to settle the loan first and get the bank to reassign the property back to him.

STEP 3: Get details of parties involved

A person who buys a house or land must attain the age of majority based on Section 43 of the National Land Code (NLC) 1965. To indicate the individuals’ eligibility, they must be able to provide a document as proof that he has attained the age of majority.

  • MyKad Copy (IC)

A Malaysian citizen must be able to provide a MyKad copy to the relevant authority or lawyer.

  • Passport 

This applies to non-Malaysian citizens. A copy of the passport must be submitted to the relevant authority or lawyer.

Your personal identification is also needed by the relevant authorities such as Land Office for the said transaction.

STEP 4: Prepare property information 

You cannot start the transfer of land title without knowing what you are dealing with. For this reason, you need the latest information on the land title. You can do this by conducting a land search at the Land Office.

With the land material details ascertained you or your lawyers from the result of the land search will have a glimpse of the procedures that need to be complied with. Getting the result of the land search would allow your lawyers to have a base idea of how long it would take to transfer the land title. If you appoint a lawyer, the land search will be conducted by the lawyer. Among the key information that you will look for in a land title as well as in a land search are:

  • If the land is subjected to Restriction in Interest, which means the owner of the land or the vendor cannot deal with the land unless he obtains consent from the State Authority
  • If the land is an estate land in compliance with Section 214A of the NLC 1965, to transfer any estate land, the owner or the proprietor of the land must obtain consent from the Estate Land Board
  • If the land is subjected to a charge, the purchaser would need to require the vendor to firstly discharge the charge on the land title.

READ: How to conduct a land title search in Malaysia?

STEP 5: Prepare personal tax information for RPGT

In the beginning, it must be ascertained if the vendor is liable to pay any real property gains tax. A Real Property Gains Tax (RPGT) is a tax charged by the government on the profit that you make from selling the land. Therefore if you make a gain or profit from it, then you are is liable as a vendor to pay this tax. For that sole reason to order prepare for this process, you need to prepare your tax registration number. This information will then be used for this process at the Inland Revenue Board (LHDN).

The good news is that Malaysian citizens and permanent residents who dispose of their property from the sixth year onwards will no longer have to pay RPGT, effective 1 January 2022.

STEP 6: Agree on the land/property purchase price

All the parties would need to come to terms with or agree on the full purchase price as well as the breakdown of the payments. For example, the earnest deposit, balance deposit and balance purchase price. Parties need to also agree on the payment schedule of the transaction. Once the balance of the purchase price is fully paid, the new proprietor’s name will be registered on the title and a new title will be issued by the Land Office.

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Who are the 7 parties involved in a land title transfer?

buy-house-agent-seller
© Saksit Kuson / EyeEm | Getty Images

Aside from the vendor and the purchaser, other parties must cooperate and be involved to complete the land title transfer transaction. Below are the parties involved to ensure a successful transfer of the property;

1. Property seller (vendor)

The vendor is the party who owns and sells off the property. Where there is a title issued to the property, the appropriate authority to confirm registered ownership of the property is the Land Office. However, if the title has not yet been issued, then the appropriate body to confirm beneficial ownership is the property developer who is the current registered owner of the master title.

2. Property Purchaser

The purchaser is the party that buys the property and has to pay the purchase price of the property. The purchase price has to be paid in the manner as set in the SPA.

3. Property seller’s lawyer/ solicitor 

The seller’s lawyer acts on behalf of the vendor, and their duties are as follows: 

  • To ensure that the purchase price is received based on the completion date
  • To assist the vendor to pay the tax if there is a chargeable gain
  • To apply for the consent of transfer if the land is subject to restriction in interest
  • To make sure that the title to the property is rendered and delivered to the purchaser’s lawyer.

4. Property purchaser’s lawyer/ solicitor 

The purchaser’s lawyer acts on behalf of the purchaser, and their duties are:

  • To prepare the SPA, MOT, entry and withdrawal of caveat (Form 19B and  Form 19G), and CKHT 2A to LHDN
  • To register the MOT at the Land Office
  • To ensure that the title is registered in the name of the purchaser upon full payment of the purchase price to the vendor.

6. Property seller’s financier lawyer

The vendor’s financier lawyer acts to execute the discharge document once the vendor’s loan is settled. The document would be discharged by a Deed of Receipt and Reassignment (DRR). The vendor has to either settle the outstanding loan on his own or it can be settled by the purchaser from the purchase price.

7. Government agencies

Below are the relevant authorities involved to complete every process of transaction to transfer the land title to the purchaser or the buyer:

Land Office and Pejabat Tanah Galian

For land search, registration of caveat, and MOT, collection of land title

Inland Revenue Board (LHDN)

For payment of RPGT and stamp duty

Insolvency Department

For bankruptcy search

Valuation and Property Services Department (JPPH)

Valuation of property for stamp duty

Local Authority

To obtain consent for the transfer of title

Do you need state consent for a land title transfer

State consent is required if the title has a restriction in interest, ie the property cannot be sold without the consent of the state authority. If this is the scenario, you will need to first prepare an application form for consent from the state authority to transfer the property to the purchaser. The application form can be obtained from the relevant land office.

Section 5 of the NLC 1965 provides that a restriction in interest is any limitation imposed by the State Authority on any of the powers conferred upon a registered proprietor to deal with his land by way of a transfer, lease, charge, easement, tenancy, or statutory lien over his land, as well as his powers to subdivide, partition or amalgamate his land. The effect of a restriction in interest is that it limits the rights and powers of a proprietor to freely deal with his land.

Therefore, if a registered proprietor wishes to transfer a land title to another party, he must first obtain the consent of the State Authority. Failure to obtain consent to deal with the land will render any transaction entered by the proprietor void and unable to be registered. In a real-world scenario what this means is the Land Office won’t even start the land title transfer process.

What will a purchaser’s lawyer do in a land title transfer procedure?

If the property to be transferred has a land title, these relevant documents will be prepared by the purchaser’s lawyer:

  1. Prepare and assist the vendor to execute the SPA
  2. Assist vendor to execute the MOT
  3. Prepare the RPGT Form for the vendor CKHT 2A (RPGT)
  4. Assist the purchaser to apply consent from the State Authority to transfer the property (if it is needed)
  5. Prepare and register a  private caveat form (Form 19B) together with the statutory declaration of the vendor; and
  6. Prepare and register a withdrawal of caveat (Form 19G).

What will a property seller’s lawyer do in a land title transfer procedure?

These relevant documents will be prepared by the property seller’s lawyer:

  1. Assist the purchaser to execute the SPA (that has been signed by the seller)
  2. Prepare the MOT to register the Land Title under Purchase’s name
  3. Prepare the RPGT Form for the Purchaser CKHT 1A (RPGT)
  4. Obtain relevant information from the Purchaser for the land title transfer transaction.

How much is the fee for the transfer of land in Malaysia?

There are charges that you need to take note of if you are intending to transfer land:

As a property owner or property seller

Here are the fees that you need to keep in mind if you are the owner of a property or land:

  • Payment of RPGT tax (chargeable gain if any)
  • Payment of quit rent and assessment rent (of the current year)
  • Payment of outstanding loan/redemption sum (if applied)
  • Payment of registration for State’s consent (if applied)
  • Payment of legal fees to the vendor’s lawyer (refer to the table below)

Legal fee for transfer of land in Malaysia

The following are the legal fee rates according to the house price tier:

House price tierLegal fee rate (%)
First RM500,0001%
Next 500,000 (RM500,001 – RM 1 million)0.8%
Following RM2,000,000 (RM1,000,001 – RM 3 million)0.7%
Next RM2,000,000 (RM3,000,001 – RM 5 million)0.6%
Thereafter (> RM 5 million) 0.5%

For example, if you purchase an RM1.3 million house, the legal fee calculation will be:

(RM 500,000 X 1%) + (RM500,000 X 0.8%) + (RM300,000 X 0.7%)

= RM5,000 + RM4,000 + RM2,100

= RM11,100

As a home buyer or property purchaser

Purchasers need to pay a sum of money as well as part of the land transfer procedure. They are as follows:

  • Payment of stamp duty tax
  • Payment of MOT registration fee
  • Payment of legal fees to the purchaser’s lawyer.

How long does it take to transfer a land title in Malaysia? 

land-transfer-sell-house
© gearstd | 123RF

The land transfer procedure in Malaysia will take about three (3) months from the day you have signed the SPA provided there aren’t any encumbrances on the land title. Meanwhile, in a situation where the process of transfer requires the vendor to ask for the State Authority’s consent, it could take up to more than six (6) months from the date of signing the SPA. However, it is also important to note that if the land is still subjected to a charge, the vendor or the owner must first discharge the charge from the property and then the transfer of title can be transferred to the buyer.

What about property transfer between family members?

What happens when you transfer a property between family members? If there is no SPA involved, you will still need to submit the Memorandum of Transfer, or Form 14A, However, there is a special stamp duty exemption for the transfer of property between spouses, parents and children, also known as the “love and affection transfer”.

The rate of the exemption depends on the persons involved in the transaction:

  • Husband to wife: 100%
  • Wife to husband:100%
  • Parent to child: 50%
  • Child to parent: 50%

If the property is still charged to a bank, the housing loan must be fully settled before the transaction can take place. Alternatively, you can get a new loan for the property.

There is also a 100% exemption on RPGT for love and affection transfers which is deemed as “no gain, no loss”.

For transfers between any other family members, such as those between grandparent and grandchild or between siblings, these exemptions do not apply. However, as mentioned above, the current guidelines state that there will be no RPGT if the property is transferred from the sixth year onwards.

READ: What you need to know about transferring property to family members

How to transfer the legal title of a property through a will?

In some cases, a property might be transferred to another person through a will (for non-Muslims). In such cases, the executor of the will firstly need to apply for a Grant of Probate through the High Court. With the Grant of Probate, the executor will have the power to administer the property on behalf of the deceased. The property can then be transferred to the beneficiary with the memorandum of transfer, or Form 14A. Besides the usual documents required for a land transfer, you will also need to present the Grant of Probate at the Land Office.

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Transferring land in Malaysia involves a lot of paperwork and documents, so make sure you have everything before you start the process. Choose a lawyer who is well-versed with the process and can properly represent you.

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This article was originally published as Land Transfer Procedure In Malaysia by ASCO Law and is written by Akmal Saufi Mohamed Khaled.

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