The ‘Other Costs’ Besides Quit Rent, Loan Interest
Daily Express, Photo Credit to Daily Express
clock 20-10-2019
hit 66

QUIT Rent is a form of land tax collected by state governments via Land Office and is imposed on owners of all alienated land — freehold and leasehold land). 


Under the National Land Code, it is compulsory for owners of all types of properties to pay quit rent annually to the relevant Land Office. For most states, the last date for payment is on or before May 31. 

The amount of quit rent a home owner is required to pay varies from state to state. 

When Selangor decided to increase its quit rent drastically by up to 800 per cent this year, many people have questioned the purpose of it. 

Market consultants say the move by Selangor Land and Mines Office (PTGS) to increase quit rent by about eightfold is unreasonable. 

Senior adviser Kumar Tharmalingam questioned the rationale behind the increase amid an economic slowdown. 

He said many people and himself were puzzled by the sudden increase in costing as there was no consultations with any parties. 

“Why are they taking so much money? You must ask the local council the reason for the rate increase? It’s hard to believe if it’s because local councils have no money. So far, in all these years, no citizens have ever questioned how local councils spend their money. 

“Even politically, this is not a good idea.... you’re trying to make everybody happy in this country and you come up with this incremental cost, in addition to the (current high) cost of living. This (could) make people very suspicious as to where the money is going,” said Kumar. 

He said the people should know how their money is spent. “What is the expenditure and where do they spend the money? How do we pay for the services and where is their cost? Is the local council paying extra rents or very high salaries? 

“They (local councils) need to come out and justify the cost increase. If they can’t justify it, then that is something to worry about,” said Kumar, adding that the quit rent hike has affected a lot of people. 

He also pointed out that the local council was not being friendly to the public in explaining on the rationale behind the rate hike. “There is an increase of 500 to 800 per cent, which is a lot of money. The local council has to explain why it is necessary.” 

Kumar believes the quit rent hike will affect the market, although not by a large scale. 

The consumer segment that is most vulnerable to it is those buying affordable homes below RM600,000.

Any slight increase in rates affects a person’s household budget, he said. 

“Most apartment owners look at the rates as a charge. On top of the quit rent, they are paying service charge to the joint management body (of their property). They are also paying the assessment rate twice a year. So it is becoming very expensive,” he said. 

However, Kumar doesn’t think the rate hike would affect the sale price of high-rise dwellings although he foresees property developers shying away from such developments and focusing on landed properties. 

A resident in Petaling Jaya, who declined to be named, said she now has to pay RM200 a year instead of RM43, following the quit rent hike. 

“This is ridiculous. The jump is not 10 per cent but triple-digit. We want PTGS to explain the sudden hike. I sent them an email early this month for an explanation but they have not responded. I don’t understand why state governments still require property owners to pay quit rent when the land and building is legally ours?” she said.


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