GEORGE TOWN: Chief Minister Chow Kon Yeow unveiled significant changes to the state’s quit rent tax system, with the new rates set to apply to nearly 370,000 land titles across Penang, effective Jan 1 next year.
Under the new system, residential land tax in urban areas will rise from RM0.54 to RM0.70 per square metre, with a minimum tax of RM70 per lot, a 29.63 per cent increase.
The increase will affect urban areas such as Jelutong, Tanjung Bungah, Bayan Lepas, Bayan Baru, Balik Pulau, Seberang Jaya, Bukit Mertajam, Bertam, Batu Kawan, and others.
In rural areas, the rate will increase from RM0.22 to RM0.50 per square metre, with a minimum tax of RM50 per lot, a 127.27 per cent rise.
Chow said the state government is expected to collect more than RM300 million annually from quit rent by 2029, following a three-year tiered rebate system.
“The state government believes this land tax review is necessary now, as rates have not been revised in the last 30 years.
“This has led to stagnation in land tax revenue. Furthermore, tax arrears and collection leakage have increased because tax data could not be fully updated,” he told a press conference today.
Chow said the review does not involve the 300,000 strata title tax accounts, which were last reviewed in 2019.
Strata title owners will continue to pay the existing rates. The new land tax rates were approved by the National Land Council in 2024.
“As this review will only occur once every 10 years, these new rates will remain unchanged for a minimum of 10 years until the next review,” he added.
To reduce the financial impact and burden on all landowners, a tax rebate of 32.5 per cent will be implemented in 2026, followed by a 20 per cent rebate in 2027, and another 20 per cent rebate in 2028.
“This land tax rebate will benefit all landowners in Penang, regardless of land category or use.
“However, landowners who receive this rebate must pay the current tax rate if the tax amount after the rebate is lower than the amount paid in 2025.
“This rebate will result in the state government not being able to collect between RM80 million and RM100 million per year from 2026 to 2028,” he said.
In addition to the rebate, the state government will also offer other incentives to all landowners in Penang.
These include a 100 per cent waiver of tax arrears penalties for both land and strata title tax from Jan 1 to Dec 31, 2026, covering penalty arrears totalling RM25 million; a 50 per cent discount on premium rates for land use conversion from agricultural land to residential buildings, subject to planning guidelines; and various gifts, including kitchen items and a lucky draw for land and strata title taxpayers who pay via the PG Land app online.
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