A RURAL landowner’s annual land tax was reduced from RM68,000 to about RM12,000 after an appeal led to a reassessment of how his 2.4ha property in Penang was classified.
Pulau Tikus assemblyman Joshua Woo, who serves as public liaison for the Land Tax Concerns Coordination Committee in Penang, said the land had initially been assessed under the commercial category.
After a site inspection, Woo said that only about half of the land was rented out for businesses and farming.
“It was not entirely used for commercial activity.
“Based on this mixed usage, the category was revised to ‘others’. The annual land tax was then reduced from RM68,000 to about RM12,000,” he said.
Woo said the revised amount worked out to roughly RM1,000 per month for the 2.4ha land generating rental from three businesses and one farm.
He added that he had handled more than 25 similar cases so far.
In another instance, a landowner complained that his First Grade land was charged at a commercial rate.
First Grade land titles, which are only issued in Penang and Melaka under the National Land Code, are a freehold and legally flexible land title allowing the land to be used for various purposes, without the restrictions stated on other titles.
“Our visit showed that the building on the land was not an active warehouse,” said Woo.
“The district office is now deliberating on recategorising the land to ‘others’,” he said.
In a separate case, he said the landowner’s hilly plot of land was categorised as a commercial durian plantation.
“When we went up the hill for a site visit, we found that the plot was not used for plantation or commercial purposes.
“The district office will also re-examine the category of that plot,” he said.
Woo said not all appeals would qualify for reassessment.
“The reason some properties might be wrongly classified is due to a lack of access to private property.
“Satellite imaging might not be clear, or the land might be categorised based on surrounding properties, such as industries.
“If they want to appeal, they should head to the district office or reach out to us for guidance.
“The appeals do not take too long and land can be reclassified,” said Woo.
In earlier reports, Penang Chief Minister Chow Kon Yeow said that out of 370,000 new land tax bills issued under the revised formula, the state had received about 300 appeals.
“We understand that some lots will see a large increase, so we have given a 50% rebate to all categories.
“So far, we have received less than 1% of appeals against the new land tax rates.
“I urge landowners to submit appeals if they feel the new rates are unfair or are not according to the correct classification,” he said.
Chow said land tax was calculated based on location. This includes whether the land is in an urban or rural area, the size of the land, its current usage and the prevailing rate.
The rate is 70sen per sq metre (sqm) for residential land in urban areas and 50sen per sqm for residential land in rural areas.
“In the past, rates for agricultural land were calculated by hectare, at RM9.88 per ha. However, if the land is converted into industrial or commercial use, the rate will be RM3.25 per sqm.
“If the owner of a 5ha agricultural plot used to pay only about RM50 a year, but the land is now used for industrial purposes, the new rate would be RM162,500,” he said.
Chow said the 2026 land tax rate was considered fair to all landowners, without differentiating between First Grade and non-First Grade land.
“Landowners should submit an appeal in cases where there are discrepancies in land classification,” he said.
