New quit rent burning holes in pockets, says group

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Ratepayers Penang says the parcel quit rent system is not fair. (File pic)

GEORGE TOWN: A pressure group calling itself Ratepayers Penang has decried the parcel quit rent system introduced nearly a year ago, saying many affected property owners are being hit hard.

The leader of the group, KN Lee, told FMT owners of stratified properties were having to pay a lot more than they used to in quit rent because of the use of a formula that removes burden-sharing from the calculation.

She said the resultant hike was “unfair and excessive” and would be even more intolerable with an increase in city council assessment rates that is expected next year.

She urged the state government to revert to the previous system, under which dwellers in high rise buildings shared the quit rents.

The parcel rent is a form of land tax that owners of stratified properties pay directly to the land office instead of through their management boards, as was the practice before the system was introduced.

The amount the owner of a unit pays depends on the unit’s floor space, and rates vary according to the location of the building. Previously, the rent was based on the size of the lot a building stood on and the amount charged was divided among the owners of units.

In Penang, the parcel quit rent system has been in effect since Jan 1. The Penang Land and Mines Department has waived this year’s late penalties in consideration of the newness of the system.

The state expects to collect RM11.1 million, about double the amount collected under the old system.

Lee said estimated calculations had shown that the quit rent for commercial and retail properties were now significantly higher.

Even regular shophouses were not spared, she added.

She gave the example of a three-storey shophouse paying RM300 in quit rent under the old system. Due to the multiplier effect of the parcel rent, she said, the same shophouse would now have to pay RM900.

“If a building is 50 storeys high, it will be 50 times the collection without taking into account the spaces for the lifts, corridors and common areas.”

Lee said the state government owed it to ratepayers to explain how it would spend the increased collection for their welfare.