GEORGE TOWN: Landowners in Penang can submit appeals regarding the recent land tax increase to their respective District and Land Offices, said Chief Minister Chow Kon Yeow.
Chow said the state government would provide ample time for landowners to adjust to the new rates and had introduced measures, including rebates of up to 50% this year, to ease the transition.
"Special consideration will also be given to First Grade properties and lands affected by the reclassification of rural areas to urban status," he said in a statement on Sunday (Feb 15).
He said the revised rates, effective this year, are based on the land's current use rather than outdated nominal agricultural rates that have been in place since 1994.
He said many First Grade titleholders, whose lands were previously taxed at minimal rates, are now seeing significant increases, particularly for industrial, residential, and commercial uses.
“For First Grade lands, the tax increase is not due to higher residential rates but reflects the actual use of the land.
“We are aware that some landowners are affected by these changes, and the appeals process ensures they have a fair chance to request reductions," he said.
Under the new system, industrial land is taxed at RM3.25 per square metre across the state, residential buildings at RM0.70 per square metre in urban areas and RM0.50 in rural areas, and commercial properties at RM3.25 per square metre in urban areas and RM2.80 in rural areas.
Out of 370,000 registered land titles in Penang, 230,000 are First Grade, many of which do not clearly state the land category or specific conditions.
Chow said these titleholders had been paying low agricultural rates despite their land being used for residential, commercial, or industrial purposes.
During the 2024–2025 review, administrators found that many First Grade titles were taxed under outdated agricultural categories, such as paddy or oil palm, resulting in nominal payments even for large plots with buildings.
The state government has delegated authority to district land administrators to approve tax reduction appeals up to RM20,000, while appeals exceeding this amount may be submitted to the Penang Land and Mines Director and the State Executive Council.
Landowners eligible for rebates include those using land for public purposes, facing financial hardship or disability, whose land lacks access roads, or who are involved in incomplete development projects.
Other categories include First Grade lands under the 2026 review, durian plantations, and properties affected by rural-to-urban upgrades.
