Quit rent rates must follow National Land Code, says Ratepayers Penang

Ratepayers Penang suggested that residential and commercial classifications be merged under a single ‘building’ category with a uniform rate. (Pexels pic)PETALING JAYA: Standardising Penang’s quit rent rates with the National Land Code is necessary to ensure transparency and fairness, says an association of Penang ratepayers amid concern over the recent increase in the state’s quit rent.Ratepayers Penang welcomed chief minister Chow Kon Yeow’s decision to allow appeals by ratepayers dissatisfied with the hike, but cautioned that quit rent must be “administered strictly within the legal framework and not on a discretionary basis”.The group said under Section 52 of the code, land use categories are limited to the three classifications of agriculture, building and industry.“However, the revised Penang quit rent structure subdivides these categories into several sub-classifications, including residential, commercial and multiple agricultural crop types such as rubber estates, palm oil estates, fruits, industrial crops, cash crops, durian plantations and others.“The classification of buildings into residential and commercial categories creates uncertainty, particularly in areas such as George Town, where at times residential buildings are used for commercial purposes while owners continue to occupy them.“Such classifications may depend on discretionary site visits. This is problematic and may lead to inconsistent rates,” it said.Ratepayers Penang also said the creation of multiple agricultural categories results in unequal treatment, with durian plantations being charged RM800 per hectare, while other fruit crops are charged RM80 per hectare.“This seems arbitrary, as there appears to be no transparent scientific or economic basis demonstrating the differing returns per hectare,” it said.Ratepayers Penang suggested that residential and commercial classifications be merged under the “building” category at a uniform rate, and that all agricultural and farming activities be subject to a standard rate to encourage food security and agricultural sustainability.“The rate structure should align with the categories prescribed under the National Land Code,” it said.On Sept 19, the Penang government implemented a review of quit rent rates and the reclassification of rural land to urban land, in line with the provisions of Section 101 of the National Land Code, effective Jan 1 next year.The review affects nearly 370,000 land titles across Penang, covering residential, commercial, industrial, agricultural and other land categories.The group said the revised rate structure was now based on land use, and that many parcels of land had changed use over the past 30 years since the last revision, leading to sharp increases in quit rent.“For example, agricultural land previously used for rubber planting may now be classified under higher-value crops such as durian, resulting in values rising up to 10 times,” it said.

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Quit rent rates must follow National Land Code, says Ratepayers Penang

The association welcomes the appeal mechanism for ratepayers but insists the tax be administered strictly within the legal framework.

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