BUTTERWORTH: Owners of a block of low cost flats here are in a jam after their quit rent, or land tax, shot up by 502% this year.
It is because after the developer built the 10-storey block decades ago on first grade freehold land, the strata title process was never done and the land was never converted to residential use.
After the state adopted a "current use" policy for land taxation this year, it is learnt that the joint management body (JMB) of the flats, Rumah Pangsa Bola-Bola on Jalan Raja Uda, saw their roughly one hectare land taxed RM22,120 a year now instead of RM3,676 in previous years.
The block of flats, with units measuring between 610 and 689sq ft, became an "attraction" in the latest episode of open friction between Chief Minister Chow Kon Yeow and his predecessor Lim Guan Eng.
Lim, who is Bagan MP, had earlier raised the issue affecting the flat's residents in his parliamentary constituency.
Responding in a statement on Saturday (March 7), Chow said the state's new land taxation approach was calculated using four criteria: whether land is classified as urban or rural, land size, current use and the applicable rate.
He rejected claims that the formula or the system was insensitive to landowners.
"Such claims are baseless. The state government always welcomes feedback, including appeals related to this matter," he said.
Chow added that the state continuously monitored issues faced by affected landowners and would refine implementation guidelines and the appeal process to help stakeholders adjust to the new ecosystem.
He said decisions on appeals received by district and land offices would be announced after the next state executive council meeting.
On the Bola-Bola flats specifically, Chow said the land title remained first grade freehold without category or conditions.
He said the building had yet to be subdivided and did not have strata titles, which meant the tax was calculated based on the land instead of individual parcels.
"If strata titles are issued, the tax rate will change according to parcel tax rates," he said.
Chow added that based on the feedback received, the Bagan MP should advise the JMB to contact the Land and Mines Office or the relevant district land office to review the tax calculation.
He reiterated that landowners, including elected representatives, should deal directly with district and land offices to obtain clarification and submit appeals if necessary.
Chow said the state government had taken steps to ease tax burdens in other sectors.
He cited a decision announced in January to impose a nominal land tax rate of RM50 per lot for all government and private schools in Penang.
School managements have been urged to update land use records with land offices so they can qualify for the nominal rate, he said.
The state recently formed the Land Tax Concerns Coordination Committee to help landowners, especially those with first grade land titles, with their appeals to the Land and Mines Office.
