Overdue revision: Penang will increase quit rent in the state at the beginning of next year. — CHAN BOON KAI/The Star
GEORGE TOWN: Come Jan 1, about 370,000 land title owners in Penang will face an increase in their quit rent rate of between 29% and 200%, a move that has raised eyebrows.
This means they will be paying an additional 16sen per square metre following the state’s decision to revise the quit rent rate which has not been reviewed for 31 years.
To minimise the financial burden on the people, a 32.5% tax rebate will be provided next year, followed by a 20% rebate in 2027 and 2028.
Penang Real Estate and Housing Developers’ Association (Rehda) chairman Datuk Khoo Teck Chong said the decision to increase quit rent for the first time in 30 years was understandable, but the timing was not right in view of the economic climate.
“The hike will also raise the land holding costs for developers,” he said.
However, Khoo said the rebates offered by the state government will help mitigate the impact.
Penang Ratepayers Association president KN Lee urged that the new rate be deferred to 2029 to coincide with the next 10-yearly review of parcel rent, which was introduced in 2019.
“When parcel rent was implemented, revenue already surged as a block that used to pay RM500 now pays RM2,000.
“It is only fair that the next adjustment be aligned with 2029.”
She added that quit rent should be based on property value in different areas, such as George Town and Balik Pulau, instead of being standardised across Penang.
Balik Pulau Durian Growers and Durian Entrepreneurs Association chairman Goh Choon Keong described the new RM800 per hectare rate as exorbitant.
“Fertiliser and related costs have already gone up by almost 30% in the last five years.
“This quit rent increase is another blow to durian growers.”
MCA vice-president Datuk Tan Teik Cheng said the revision was unfair at a time when the people have to deal with inflation and higher living costs.
“It is not the right time for such a move,” he said.
Chief Minister Chow Kon Yeow, in announcing the revised rates yesterday, said it will raise about RM200mil for the state government next year, from the current RM140mil, and over RM400mil after the rebate is no longer available, starting 2029.
He said the money can be channelled to welfare programmes and cost-of-living assistance schemes, adding that the last adjustment was 31 years ago.
“This delay in increasing the rates has deprived the state government of an increase in revenue. Tax arrears and leakages in quit rent collection have also increased as tax data adjustments could not be done comprehensively,” he said, adding that there will not be additional hikes for the next decade.
Individual residences, which now pay 54sen per sq m, will be paying 70sen per sq m, with a minimum payment of RM70 per lot for all land in the city category (29.63% increase).
For rural land, it will be increased from 22sen to 50sen per sq m, with a minimum payment of RM50 per lot (127.27% increase).
“All owners of residential land with an area of less than 100 sq m or 1,076sq ft will pay a minimum tax rate of RM70 per year in city areas or RM50 per year in rural areas.
“This minimum rate includes low-cost houses, low-medium cost houses and some of the affordable housing or Rumah Mutiaraku schemes,” he told reporters.
The quit rent for industrial land will be increased from RM1.29 to RM3.25 per sq m throughout Penang.
The rate for businesses has also been raised to RM3.25 per sq m in urban areas and RM2.80 per sq m in rural areas with a minimum payment of between RM280 and RM325 for land areas less than 100 sq m or 1,076sq ft.
For agricultural land, tax rates will be between RM15 and RM120 per hectare, depending on the type of crop grown. Durian plantations will be imposed taxes of RM800 per hectare.
Chow said for livestock farming, the increase is between RM250 and RM750 per hectare, depending on the type.
“Several new categories have been introduced under the special rate, including golf courses at RM2,500 per hectare, RM3.25 per sq m for quarries, 54sen per sq m for all Federal Government land under the Federal Land Commissioner’s holding and a nominal rate of RM50 per lot for mosques, non-Islamic places of worship and cemetery land.
“We have introduced new rates of RM50 per lot for village houses as well,” he said.
Chow said other incentives include a 100% waiver of fines on outstanding land tax and parcel tax arrears from Jan 1, 2026, until Dec 31, 2026, involving a total of RM25mil in fines.
The increase in quit rent follows the state government’s move to redraw 10 town boundaries and gazette 25 densely built areas as townships instead of villages or rural areas.
The 10 expanded townships are Bayan Lepas, Balik Pulau, Batu Ferringhi, Tanjung Bungah, George Town, Bukit Mertajam, Sungai Bakap, Nibong Tebal, Kepala Batas and Butterworth.
The 25 newly created townships are Bayan Baru, Batu Maung, Sungai Ara, Pulau Silikon, Bukit Jambul, Puncak Penara, Perdana Mutiara, Pinang Emas, Bayu Emas, Lembah Perai, Alma, Bukit Minyak, Bukit Tengah, Bandar Perda, Seberang Jaya, Jawi, Bandar Cassia, Simpang Ampat, Bandar Tasek Mutiara, Sungai Dua, Teluk Air Tawar, Bertam, Tasek Gelugor, Pokok Sena and Ara Kuda.
Penang has a total of 42 towns.
