KUALA LUMPUR – New assessment tax rates for Petaling Jaya properties starting January 2025 will be lower than previous rates, which were last reviewed 33 years ago.
However, the quantum of tax to be paid each year will be up to 25% higher than previous amounts since the last revision in 1992.
Previously, the tax rates for residential properties were 5.5%, 7.7% and 8.8%, according to the type of property. The new rate effective next year will be a standard 4% for all types of residential property, a Petaling Jaya City Council (MBPJ) corporate communications spokesperson told Scoop.
For low-cost high-rise residences, the tax rate drops from 5% to 2%, while for other housing types such as flats, apartments and condominiums it is standardised at 3%, down from 5% and 6%.
The assessment rate for serviced apartments in Petaling Jaya will also be lowered to 3.5% from 6.6%.
For industrial and commercial buildings, the new assessment tax rate is 5% compared to 6.6% and 8.8% previously.
The new rates for Petaling Jaya can be viewed at an online infographic by MBPJ, while other councils will post their own rates on their respective portals.
A check by Scoop on the different websites of Selangor local councils found that most of them would be lowering their assessment rates, with a few maintaining the current rate for certain property categories.
The new rates are in line with Selangor’s review of property and asset valuations to ensure efficient urban planning in the state.
Selangor local government and tourism executive councillor Datuk Ng Suee Lim was reported saying the property and assets valuation exercise involved all 12 of the state’s local authorities, while Menteri Besar Datuk Seri Amirudin Shari said the exercise was not indicative of an increase in assessment tax.
How rates are calculated
A property’s annual value is set by the assessment and asset management departments of the respective city councils, an explanation by MBPJ said.
The department can change the property’s annual value if a building is constructed, renovated, demolished or rebuilt on the property.
An asset’s annual valuation is determined by multiplying the asset’s monthly gross rental yield by twelve.
The amount of assessment tax to be paid will then be calculated by multiplying that sum by the new tax percentage.
Because of the rise in property prices, the monthly gross rental yield also increases, resulting in a higher amount of tax paid even though the new assessment rates will be lower than before.
For vacant lands, the annual value will be set based on a 10% rate of the property’s market value.
Although Section 137(3) of the Local Government Act 1976 states that asset and property valuations must be carried out once every five years, the law also allows local authorities to extend the period.
Both MBPJ and Subang Jaya City Council have not conducted a valuation and assessment rate revision since 1992, while seven other local authorities in Selangor, including Kajang Municipal Council and Klang Royal City Council, have raised their assessment tax rates for the past 20 to 40 years.
For example, Kuala Langat Municipal Council has not reviewed assessment rates since 1987, while Selayang Municipal Council has not reviewed them since 1992.
The last assessment rate review by Ampang Jaya Municipal Council and Kuala Selangor Municipal Council was 27 years ago, while Hulu Selangor Municipal Council has not adjusted its rates in 28 years.
Shah Alam City Council also last reviewed its rates in 2006.
Property owners who want to object to the new rates have until a deadline set by their respective local council as stated on the council’s website. – July 3, 2024