Short answer: "free MOT" is a developer sales incentive, not a legal exemption. The stamp duty on the transfer is still assessed and still paid to LHDN. The developer simply agrees to bear it instead of you, and that agreement lives in your contract, not in any statute.
There is a genuine MOT exemption in Malaysian law. It is narrow, it is gazetted, and it has nothing to do with developers. Both things are worth understanding, because they interact in a way that decides whether a "free MOT" offer is worth anything to you at all.
The Offer: What a Developer Actually Means
When a new launch advertises free MOT, the developer is offering to absorb the stamp duty on the Memorandum of Transfer, the instrument that moves the title into your name. Sometimes the offer extends to the transfer legal fees, sometimes to the financing agreement duty as well, and sometimes to neither.
Three things follow from it being a contract term rather than a waiver:
- The duty is still assessed. LHDN charges the instrument as normal. Nothing about the ad valorem calculation changes.
- The scope is whatever your SPA says it is. "Free MOT" is marketing language with no fixed meaning. Get the clause and read what is actually covered: the transfer duty alone, the transfer duty plus legal fees, or a capped ringgit contribution.
- The obligation has to survive the wait. On a new development the MOT is frequently executed years after the SPA, once the individual or strata title has been issued. An incentive that is not written into the agreement is an incentive that may not exist by the time the bill arrives. See when the MOT is actually executed.
There is a related offer worth separating out. The Solicitors' Remuneration Order 2023 puts a purchase from a developer on its own fee table. Table B of the First Schedule covers any transaction governed by the Housing Development (Control and Licensing) Act 1966, and it is already a reduced scale: RM500 up to RM50,000, then 75%, 70%, 65% and 50% of the Table A fee as the consideration rises. Paragraph 6(2) then permits no discount at all on it. So "free legal fees" on a new launch means the developer is paying that reduced fee in full on your behalf, and nobody can go lower.
On a sub-sale the ordinary Table A scale applies and paragraph 6(1) permits a discount of up to 25%, which is a discount you can ask for yourself. Details in our Solicitors' Remuneration Order guide.
The Exemption: What the Law Actually Gives
One MOT exemption is in force in 2026.
| Detail | |
|---|---|
| Relief | 100% exemption on the instrument of transfer |
| Order | Stamp Duty (Exemption) Order 2021, P.U.(A) 53/2021 |
| Extended by | P.U.(A) 448/2025, gazetted 23 December 2025 |
| Who | A Malaysian citizen buying a first residential property |
| Value cap | Market value not exceeding RM500,000 |
| Deadline | SPA executed on or before 31 December 2027 |
| Evidence | Statutory declaration under the Statutory Declarations Act 1960 |
A second order works in parallel on the financing side: P.U.(A) 54/2021, extended by P.U.(A) 449/2025, exempts the loan or financing agreement, including facilities from a licensed Islamic bank or a licensed takaful operator.
Two details catch people out. The cap is on market value, not the negotiated price, so a discount below RM500,000 on a more valuable property does not bring it inside the exemption. And the never-owned condition covers property acquired by inheritance or gift, held individually or jointly.
Full conditions, the expired schemes, and the live LHDN-versus-Bar conflict over service apartments and SOHOs are in our stamp duty exemption guide.
Where the Two Collide
This is the part the marketing does not address.
If you are a first-time buyer at or below RM500,000 market value, the gazetted exemption already takes your transfer duty to nil. A developer offering free MOT on that unit is absorbing a cost you were never going to pay. The offer is worth approximately nothing, and it is worth asking whether it can be converted into something that is: a price reduction, a fit-out allowance, or coverage of the fees that are not exempt.
Above RM500,000, there is no exemption of any kind, so the offer is worth real money. On an RM800,000 property the transfer duty for a citizen is RM18,000.
If you are not a Malaysian citizen or permanent resident, the offer is worth the most and the exemption is worth nothing, because it is limited to citizens. From 1 January 2026, Item 32(ab) of the First Schedule to the Stamp Act 1949, inserted by the Finance Act 2025 (Act 874), charges a flat 8% on residential property.
| Property value | Citizen, tiered | Non-citizen, flat 8% |
|---|---|---|
| RM500,000 | RM9,000 | RM40,000 |
| RM800,000 | RM18,000 | RM64,000 |
| RM1,500,000 | RM44,000 | RM120,000 |
Work out your own figure with the MOT stamp duty calculator.
What "Free MOT" Never Covers
Even a generous package leaves costs behind. The ones that most often surprise buyers:
- The land office registration fee, paid to the state, separate from the duty and set by state land rules.
- Disbursements: title searches, land office charges, registration attendances.
- The financing agreement duty at 0.5%, unless the offer explicitly says otherwise. It is a different instrument from the transfer and it is not included by default.
- Your own legal fees on a sub-sale, since a developer incentive only exists on a developer purchase.
Questions to Ask Before You Rely On It
- Is the free MOT clause in the SPA, or only in the brochure?
- Does it cover the transfer duty only, or legal fees and disbursements too?
- Is there a ringgit cap?
- What happens if the title, and therefore the MOT, is issued after the stated period?
- Would I have qualified for the gazetted exemption anyway, making the offer worthless to me?
Related Reading
- What is MOT in property: the instrument itself, and when title actually passes
- Stamp duty exemption Malaysia 2026: every exemption, live and expired
- First-time home buyer benefits in 2026
- MOT stamp duty calculator