Buying and selling a tax-free car on MM2H visa in Malaysia

One of the biggest advantages of getting a retirement visa in Malaysia is being able to buy a car tax-free.  In our case we saved about MYR 40,000 (GBP 8,000). You can only buy one car tax-free.

If you want to part exchange for a new car in the future, though, or simply want to sell the car, it is not as easy as you might expect.


We took the easy way, and used the services of our visa agent, who will do everything for you: explain the system, take you to car showrooms, and once you have selected a car, do all the paperwork for you.  Then you wait for up to several months for the car to be manufactured/assembled, and then be delivered to you.  The agent’s fee is only a small amount compared to the tax savings.


The visa agent will probably also take care of arrangements to part exchange or sell your tax-free car.  However, the car dealer you are purchasing your next car from may also help you, in which case you can avoid the agent fee.  You may find it helpful to go with someone who speaks Malay, otherwise. It seems that even if your car is several years old, you cannot sell without this bureaucratic procedure and paying some of the tax that had been previously waived.  The following is the procedure if you live in Penang.

  1. Go to the Butterworth Customs office behind Sunway Carnival.  There you need to write a letter asking permission to sell the car, and you will be told the specific format you need for the letter.  Once you have completed the letter they send it to Putra Jaya. (PJ)
  2. The Butterworth Customs office telephones you and you return to the office to pick up the reply from the PJ office.  This letter tells you how much tax you must repay.
  3. You take the letter to an office above the post office in Beach Street (7F?) and pay them the tax by bank draft, and receive a chop and a receipt.
  4. You need to download a form from the road tax department, and then go to JPJ (Road Transport Department) at Bukit Jambul with this form, receipt, the passport you had at the time you bought the car, and the car registration form – and copies of all these, and a copy of your visa.  JPJ takes the registration form and gives you a receipt.  You are now done.  You can hand the car over to the dealer, or purchaser.


Tropical Expat



  1. Hi, I would like to thank you for sharing your experience in selling the tax-free car as I have been searching at numerous sources to obtain these info but all in vain. I’m currently residing in JB and I would like to sell off my 5-year old car purchased under the MM2H too. Although different state might have different administration policy, I sincerely hope you would be able to assist me in the following:-

    1) You mentioned that there is a specific format that an intended seller would need to write to the PJ office. Could you please kindly enlighten what the key contents are, i.e. what I should cover in the letter as I intent to write to the PJ office directly. I do not know where and who to approach in JB. A sample of the letter would be greatly appreciated.

    2) How long did the entire process of obtaining the approval take?

    3) Any fees involve to get the assessment done and if I would need to pay any penalty should I decide not to sell after obtaining the assessment (if the duty to be repaid deem not viable).

    4) Any idea how the stamp duty (estimate) is calculated and how much (%) I have to repay for the 5-year old car?

    Much thanks for your help and I look forward to hearing from you soon. You have reply me via email if the info are too sensitive to be shared openly.

    Have a nice day.

    Best Regards,

    1. Hi John,

      It was a friend who sold his car, not me, but I quizzed him as I will be in the same situation sooner or later. I will ask him your questions, and when I have a reply get back to you.

      Best wishes,

  2. Hi there, I also hope to hear from you roughly how much tax/duty you’d have to pay back when selling the car. even better if there is some sort of formula guidance… if any.

    appreciate your article above, really useful for this rather complicated procedure!

    1. Hi Dennis. I can’t really tell you, although I believe there is a formula. Perhaps the government will tell you. But many things here are negotiable, so that is also worth a try.

      To easily get a better idea ask a car dealer. They should be able to give you a pretty good idea of the offical calculation.

  3. Thanks for your reply. will contact the car dealer, I think negotiate with local gov in English is a fairly challenging task…

  4. Hi John,

    I was wondering whether you further details about the permission to sell letter format. We are finding this process rather painful. Any assistance and information would be appreciated

    1. Hi Peter.

      My name’s not John, but nevermind. I don’t know any more than I have written. However, my agent would know. When I have to deal with bureaucracy I ask them to take care of it. I use Alter Domus.They are helpful and friendly.

      1. Hello,

        Apologise foe the incorrect name, thank you for your prompt reply, I will seek further assistance from Alter Domus, thanks again



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