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- Chief Minister Chow Kon Yeow said the percentage increase for the rural housing category was 127.27% and for urban areas 29.63%, while for the industrial category, the increase for urban areas was 151.94% and for rural areas 200.93%.
GEORGE TOWN (Sept 19): The Penang government has gazetted new land tax rates effective from Jan 1 next year, involving nearly 370,000 land titles across the state, said Chief Minister Chow Kon Yeow. (pictured)
Chow said the new land tax rate was approved by the National Land Council 2024 and that the review would only be conducted every 10 years, with the new rate remaining unchanged without any increase during that period until a new review is carried out.
According to him, the percentage increase for the rural housing category was 127.27% and for urban areas 29.63%, while for the industrial category, the increase for urban areas was 151.94% and for rural areas 200.93%.
The announcement was made under Section 101 of the National Land Code (Act 828) through the Penang State Government Gazette No 37 dated Sept 11, but the land tax review does not involve 300,000 strata parcel tax accounts and they will continue to pay strata parcel tax at the existing rate.
"The residential tax rate will be increased from 54 sen to 70 sen per square metre (sq m) with a minimum payment of RM70 per lot for all land in the city, for example, in Jelutong, Tanjong Bungah, Bayan Lepas, Bayan Baru, Balik Pulau, Seberang Jaya, Bukit Mertajam, Bertam, Batu Kawan and others," he said at a press conference at Komtar on Friday.
Chow said that for rural land, the tax rate for residential properties will be increased from 22 sen to 50 sen per sq m, with a minimum payment of RM50 per lot. Owners of residential land less than 100 sq m in size will pay a minimum tax rate of RM7 per year in urban areas or RM50 per year in rural areas.
He said the minimum rate includes low-cost homes, low-medium-cost homes, and some of the Rumah Mampu Milik or Rumah Mutiaraku schemes in Penang that are less than 100 sq m in size.
For industrial land, the new land tax rate has been increased from RM1.29 to RM3.25 per sq m, regardless of whether it is urban or rural, while the rate for businesses has been increased to RM3.25 per sq m in urban areas and RM2.80 per sq m in rural areas, with a minimum payment ranging from RM280 to RM325 for land areas less than 100 sq m.
For agricultural land categories, the land tax rate for paddy crops, for example, will be increased to RM15 per hectare (ha), followed by oil palm crops (RM99), rubber (RM75) and fruits (RM80), while that of cash crops such as sweet potatoes, corn and vegetables will be increased to RM40 per ha. This means that agricultural landowners, except for durian, will pay a minimum tax rate as low as RM15 per ha starting in 2026," he said.
He said the state government has also introduced new rates for durian crops, which is RM800 for each ha or part thereof, while for pig, poultry, ruminant and aquaculture farming, the new increase is between RM250 and RM750 for the same area.
Chow said several new categories were also introduced under special rates, including golf courses at RM2,500 per ha, RM3.25 per sq m for quarries, 54 sen per sq m for all federal government land under the custody of the Federal Land Commissioner, and a nominal rate of RM50 per lot for mosque lands, non-Islamic places of worship and cemeteries.
He said the state government also introduced a new rate for village houses, which is RM50 per lot, and this rate was introduced to help homeowners in that category pay a minimum rate and not be burdened even if their land area exceeds 100 sq m.
For "first grade, Condition A, B and C" lands that do not have a stated category and specific conditions, the tax rate to be imposed will be based on current use, and this decision will result in over 200,000 land titles needing to pay tax at the rate based on the current use of the land.
"The decision will also resolve the issue of state government tax revenue leakage for nearly 60 years, in addition to ensuring justice and equality for all landowners and taxpayers in Penang," he said.
According to Chow, to reduce the impact and financial burden on all landowners, a mechanism for tax payment rebates to all landowners of 32.5% will be implemented in 2026, followed by a 20% rebate in 2027 and a 20% rebate in 2028.
He also said the rebate would cause the state government to lose RM80 million to RM100 million in tax revenue annually from 2026-2028. The state government currently receives RM140 million to RM145 million in land tax revenue, while next year it is expected to receive over RM200 million and over RM400 million after the rebate is no longer available, starting in 2029.
He added that in addition, other incentives include a 100% waiver of fines on outstanding land tax and parcel tax arrears from Jan 1, 2026 until Dec 31, 2026, involving a total of RM25 million in fines.
As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.
