Tax hike faces pushback, demand for better services

SELANGOR’S decision to raise assessment taxes next year is definitely not a populist move.

From Jan 1, assessment taxes on properties in Selangor will see a steep increase, marking the first major hike in decades – 40 years in some cases.

It’s a bold move and arguably a pragmatic one that addresses decades of outdated valuations.

But it comes at the risk of public dissatisfaction, which has been expressed most vehemently.

It has sparked debates, protests and heightened scrutiny from property owners across the board.

For many, it is a strain on wallets already depleted from other rising costs coming consecutively.

The assessment rates will now be calculated based on the current rental value of properties, a stark contrast to the outdated valuations currently in use...and perhaps taken for granted.

While the Selangor government has introduced a 25% cap to soften the blow, the changes still threaten to impose significant financial burdens, particularly on owners of commercial properties and residential units in high-demand areas.

While the 25% cap offers some relief, the overall financial impact could strain businesses and homeowners who have long been accustomed to much lower tax rates.

When the local councils started sending out notices earlier this year to property owners informing them of the proposed revised valuations, it naturally caused plenty of confusion and anger.

Owners were shocked to receive notices of the increase in their property valuations and the corresponding hike that would raise their assessment charges by a 100% – or more – jump in some cases.

Upon seeking clarification, many were dissatisfied by the local councils’ explanations that the reason behind the hike was that no re-evaluation exercise had been done for the past 20 to 40 years.

Property owners were also angry when local authorities could not provide a valid explanation on how the new property valuations were determined, only saying that the charges should match higher rental prices.

Overcoming their shock, residents quickly rallied to make their displeasure known.

Many residents associations held protests and called for an immediate dismissal of the notices.

But the state government did not bow to the pressure, instead saying that this was needed to ensure greater compliance and effective enforcement in the field of assessment and public service.

In officially making the announcement on Dec 9, local government committee chairman Datuk Ng Suee Lim said there was a need to update outdated property valuations and improve local government services.

He added that many local councils had been using decades-old valuation rates, leading to significant undercharging.

While this is a fair statement, it was the abruptness of the exercise as well as the significant price hike that got many people riled up.

The question on everyone’s mind is: Why was this allowed to fester for so long? And why now?

Why did the state government allow valuation exercises and the corresponding tax rates to go unchanged for decades?

While the Local Government Act 1976 allows rates to be reviewed every five years, the state government had chosen not to exercise this provision.

Was it political sensitivities and perhaps a desire to avoid public backlash over higher taxes?

Perhaps, as frequent revaluations could result in higher taxes and public discontent...especially among voters.

By postponing the reviews, the state inadvertently allowed disparities to grow within the system, with property taxes failing to keep pace with the rising market values in many areas.

This inaction has now created a situation where the updated valuations and corresponding tax increases appear sudden and severe, sparking widespread backlash from property owners.

Perhaps the state has learnt its lesson, as Ng was reported saying that it would now consider implementing an automatic assessment tax increase every five years.

With no recourse left to ratepayers to escape the hike, the attention shifts towards what the additional revenue will go towards.

With an additional RM355mil in revenue, the onus is now on the state and local councils to demonstrate that these funds will directly benefit the people.

Residents are expecting tangible improvements such as better waste management, enhanced road maintenance and upgraded facilities in return for the higher taxes they will have to pay.

This is a chance to build trust by delivering visible improvements in public services, infrastructure and community well-being.

If managed transparently and efficiently, this tax reform could mark the beginning of a stronger and more equitable Selangor – one where resources are allocated fairly and residents can enjoy the benefits of modern governance.

While the road ahead may be challenging, there is hope that this change will ultimately lead to a better future for all.