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Press Release

Ratepayers suffer while state government reaps the profit

Aug 6, 2020

1. I urge the Penang government to review its Parcel Rent (Cukai Petak) Policy which was introduced in January last year.

2. This Cukai Petak was implemented to replace the Quit Rent (Cukai Tanah) for strata properties., which includes residential apartments including PPR units, low and medium cost flats, condominiums, serviced apartments and multi level commercial buildings.

3. Prior to 2019, the Quit Rent was issued to the respective Joint Management Bodies (JMB) or the Management Corporation of these strata properties and the management will apportion the amount to be paid by each unit.

4. The management will then pay the amount to the government. However, with the introduction of the Cukai Petak, each unit receives their own billing and the owners are responsible to make the payment directly. The Management is no longer involved.

5. This policy has seen the state government `profiteering` tremendously. I cite an example: A five-storey commercial building in Pulau Tikus standing on a 1277m² land used to pay an annual quit rent of RM3,295 in 2018 or RM2.58 per m². The same building has now seen the state government billing each parcel owner RM2.58 per m² for their units and collecting more than RM12,000 for the same land (after deducting common area).

6. One owner who used to pay RM62 for his 89m² office is now paying RM230.

7. Quit Rent or Cukai Tanah is deemed as land tax. Parcel Rent was supposedly an expansion of quit rent, meant for the convenience of the people. However, it now looks like it is nothing but a profiteering exercise.

8. Owners of high rise buildings are now paying for the air space their property is built on. So maybe the term cukai petak should be more appropriately known as ‘cukai ruang udara’ or `Air Space Tax’.

9. Meanwhile, low-cost apartment dwellers have also been impacted by this ruling. Rifle Range flats, which previously did not require its owners to pay any quit rent, is now subjected to an annual Parcel Rent of RM25 per unit and this has affected 3,699 owners there.

10. This is in great contrast to the situation in Kuala Lumpur where the B40 Group seems to be more fortunate as the quit rent for low-cost and People’s Housing Project flats is RM15 for leasehold titles and RM20 for freehold titles, irrespective of the size of the units.

11. Penang is home to hundreds of high-rise buildings , many of which contain residential dwellings. We are still in the midst of the Covid-19 pandemic and many jobs have been lost, salaries reduced and most people are living in a state of uncertainty.

12. It is timely for the Penang authorities to review the Parcel Rent policy and lessen the strain and burden experienced by most of the people.