SEVERAL landowners are calling on the Valuation and Property Services Department (JPPH) to be more transparent and reveal how limited commercial properties are valued.
It is understood that Petaling Jaya City Council (MBPJ) had approved the conversion of 633 properties from residential to limited commercial premises in Petaling Jaya to-date.
Out of this number, only 14 landowners have completed the paperwork to change their land status while about 59 others have yet to pay the premium.
The conversion of properties is approved by MBPJ but the valuation of land is done by JPPH, which is under the Finance Ministry.
Many landowners attended a press conference organised by Bukit Gasing assemblyman R. Rajiv at his office in Section 52, to complain about the process.
They said they were unable to convert the land status because of the excessive land premium they were being asked to pay.
“The valuation by JPPH is too high and most of us cannot afford to pay as it is usually six figures,” said landowner M. Rajesh.
Even with the one-off 50% discount on land premium payments given by the state government, he would still have to fork out more than RM200,000.
Rajesh owns a 671sqm property in Jalan Gasing and his business started operations in 2013.
Back then, the valuation was only RM3,100 per sqm. However, in February this year, JPPH valued his land at RM4,500 per sqm.
“Is JPPH implying that property prices along Jalan Gasing went up so much in the past three years?
“Also, JPPH’s valuation is only for the land and does not include the building,” said Rajesh, who runs a clothing boutique.
When he questioned the Petaling Land and District Office on March 30 about the hefty premium, JPPH replied in May saying that they were maintaining the rate, with no explanation given.
In the same boat is Mohd Azwar Aziz whose property in Jalan Gasing is also valued at RM4,500 per sqm by JPPH.
“This valuation is too high and I do not think it is accurate,” said Mohd Azwar.
When several landowners went to the Petaling Land and District Office to complain, they were told the valuation was final and were given three months to pay the premium from the date they received the letters from JPPH.
However, upon appeal, everyone was given a blanket extension of an additional three months to pay the premium or have their land valued independently.
Some landowners who engaged a third-party valuer found that JPPH had valued their land about 38% higher.
For example, a property valued by JPPH at RM4,500 per sqm will be charged RM232,000 as land premium after the 50% discount.
A private valuer however, put the same property at RM3,300 per sqm, making the land premium only RM170,000 after the discount.
This huge difference in pricing has got landowners upset.
“Both my properties are of the same size and next to each other but the valuation figures, which were calculated one month apart, are different,” said landowner Shyan Doshi whose properties are also located in Jalan Gasing.
He added that if owners did not pay the premium, their land status would revert to residential.
Shyan said if someone bought the land and intended to use it as limited commercial, they would have to go through the whole application process again.
“Also, if the land title says limited commercial for a certain business, shopowners cannot change the type unless they reapply to MBPJ,” he pointed out.
Limited commercial activities include art galleries, showrooms (excluding vehicle showrooms), services agencies (including tourism, advertising or property), professional services, medical clinics, IT-based businesses and creative arts.
All three owners said they bought the land with a view of getting the status converted to limited commercial.
To operate then, landowners only had to pay an annual fee of RM2,200 to obtain a temporary operating licence issued by MBPJ.
They said their temporary licences would expire by the end of the year and if the premiums were not paid for the land conversion to limited commercial, they would have to close shop.
Rajiv echoed the owners’ call for JPPH to be transparent and reveal how land was valued and what criteria were used.
He added that such a big difference in the valuation was unacceptable.
“In addition, a private valuer will give a report to landowners on how the value is derived based on certain criteria such as location, utilities and services around the area as well as previous valuations,” said Rajiv.
When the matter was brought up at the Limited Commercial Symposium organised by MBPJ in July on how the land was valued, no answer was given, he noted.
“I urge future purchasers to ensure the status of the land so they will not have to end up paying such hefty premiums.”