Selangor govt to announce new formula by April
AFTER years of dreading exorbitant lease renewal costs, commercial property owners in Petaling Jaya Old Town are finally catching a break.
The Selangor government is slashing the financial burden with a new, lower-priced formula for leasehold extensions – offering long-awaited relief to struggling shop owners.
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Petaling Jaya MP Lee Chean Chung told StarMetro the announcement was expected this month or April.
“The state government will announce the new scheme for owners to renew their leases and it will be much lower than the current rate,” Lee said, adding that it would apply to the whole of Selangor.
When pressed for details on the lower premiums, Lee said, “I think it is better to leave it to the state government to make the final decision on the matter.
“But after two years of uncertainty, we are all seeing the light at the end of the tunnel.”
Andrew Sin, a property owner in Petaling Jaya Old Town, reacted to the news with joy.
“This is such a relief! For the longest time, we were worried about how to come up with such a large sum to renew our lease.
“Now, with the state government working on a more affordable solution, it finally feels like there’s hope.
“Many of us have spent our entire lives running businesses here and this decision gives us a chance to secure our properties for the future,” added Sin.
Around 150 shophouse owners in Petaling Jaya Old Town are grappling with the same predicament, as many of their leases are expiring within the next few years.
Most were only granted lease terms of 30 to 60 years, leaving them in a difficult position.
Like Sin, many of these ageing property owners are reluctant to invest in renovations or redevelopment, feeling it would not be worthwhile given the uncertainty of their lease extensions.
When contacted, the National House Buyers Association (HBA) said it was happy that the state had approved the appeal to lower the premium for leasehold extensions.
“Many shophouse owners in areas like Petaling Jaya Old Town are in their senior years and hope that the revised premium rates will be owner-friendly, encouraging future development in the area,” said its honorary secretary-general Datuk Chang Kim Loong.
“These business owners were the pioneers of Petaling Jaya, which was originally developed as a satellite town to ease overcrowding in Kuala Lumpur.
“What the state government is doing is essentially giving wealth back to the people – without any loss to the state – while unlocking development potential in Petaling Jaya Old Town.”
He added that what remained was determining the formula and premium rates to be levied.
StarMetro had previously reported on HBA’s premium calculation proposal.
Chang proposed two methods for the state government to calculate the lease renewal premium.
The first approach follows Penang’s model, suggesting a premium set at 20% of the property’s market value.
For instance, if a property is valued at RM1mil, the premium would be RM200,000 – offering a more manageable cost for property owners.
The second option is based on a 2011 policy introduced by the late former Selangor mentri besar Tan Sri Abdul Khalid Ibrahim, which allows residents to renew land leases for RM1,000.
Drawing from this precedent, Chang proposed a similar scheme for commercial properties in Petaling Jaya Old Town, recommending a nominal fee of RM5,000 for a 99-year lease extension.
He argued that this approach would align with existing policies for residential properties and ease the financial strain on small business owners, many of whom were elderly, while also supporting the local economy.
Chang urged the Selangor government to temporarily freeze lease extension payments until a final policy was in place.
“We ask the Mentri Besar to direct the Petaling Land Office to hold off on payment requirements for now.
“Many property owners are in limbo, unsure of what to do.
“Those who have received the Borang 5A (Notice of Premium) or have pending applications should not be rushed into paying hefty sums while a new policy is still being worked out.
“It would only be fair to extend the deadline or put everything on hold until the Mentri Besar makes an official announcement,” he said.
