The lowdown on assessment rates

The Star 12/8/2004 By SALINA KHALID, K. ANURADHA

The drive-through counter service provided by MPPJ is convenient for those who have no time to queue up inside.

ASSESSMENT taxes are something that every property owner cannot avoid paying. Very often, the taxpayers are in the dark about where the money goes to.

Moreover, not many people know why they pay a certain rate while their friends and relatives living in other areas pay another rate.

Assessment taxes, too, can be perplexing if you own more than one property.

One Petaling Jaya resident pays higher assessment rates for his apartment in Riana Green, Tropicana, than his house in Bandar Utama, even though it is common knowledge that property value in Bandar Utama is higher than the latter.

Another house owner, who declined to be named, said she paid the same amount in assessment in Puchong as a house in Subang Jaya despite the latter’s rental and property market being more buoyant.

“Why should I be paying the same rates, when Subang Jaya is so much more centralised and in the middle of so many more facilities like shopping centres and eateries?”

The amount charged, in principle, varies according to the properties’ classifications which consist of residential, industrial (factories and warehouses), commercial, agricultural and vacant land.

Places of worship, public cemeteries, schools and buildings for public use are exempted.

The main payment counter at MPPJ is rather quiet now, but the place is expected to be packed with ratepayers by Aug 20.

The value of property is a common factor in determining how much you pay, but between different councils, there are also variations in how these taxes are calculated.

FEDERAL TERRITORY

In the Federal Territory, the properties are evenly spread between residential, commercial and vacant land.

Assessment tax, in general, is imposed to finance a number of public facilities such as community halls, public toilets, bus-stops, playgrounds, recreational centres and markets.

The money also goes towards building and maintaining roads and drains, cleaning residential and business areas as well as parks and factory sites. Streetlights are also maintained with the funds.

How much a property owner pays depends on location. Places like Kampung Baru, Kampung Melayu Segambut and Sungai Pencala pay about 2% of their estimated rental value.

Buildings in villages are taxed three per cent their rental value while residential buildings and vacant land meant for housing are taxed from six to 7%.

The highest rates are levied on commercial buildings, ranging from six to 12%. Rental value is set at the minimum amount.

Last year, City Hall collected about RM554.7mil in assessment fees. As of Feb 29, 134,727 ratepayers owe City Hall RM305mil.

Payments can be made at City Hall’s Treasury Department at the headquarters in Jalan Raja Laut, branch offices and one-stop payment counters.

For further enquiries on how the rates are calculated, call City Hall’s Valuation and Property Management Department at 03-2617 1000.

PETALING JAYA

In Petaling Jaya, assessment rates are based on the gross annual rental value of property, while for vacant land, rates are decided based on its open market value.

According to the Petaling Jaya Municipal Council (MPPJ), rates are generally between five and 8%.

Owners of properties in Petaling Jaya Utara pay the highest rates, at 8%. This includes locations such as SS2, Taman SEA, Taman Megah, SS1, SS3, SS4, Damansara Utama, Damansara Jaya and Tropicana.

The rates are higher because those areas have better facilities and infrastructure.

Property and land owners in areas like Kampung Medan, Taman Datuk Harun, PJS 6 and 7 and Sungai Way pay about 7%, mainly because most of the houses are squatter and low-cost units.

There are 143,400 ratepayers in Petaling Jaya and revenue from assessment last year was RM101mil.

Ratepayers can go to MPPJ’s main payment counter or the Drive-through Counter 1 from Monday to Friday, aside from mobile counters.

Payment can also be made online though Maybank2U, UOB Bank, Citibank, Ambank’s automatic teller machines and MBF's Click-and-Pay system.

Ratepayers in newly-developed areas who are dissatisfied with their assessment rates can write a letter of complaint to MPPJ within a month, and the council will consider amending the rates.

SHAH ALAM

Assessment rates in Shah Alam also take a percentage of the annual rental value of a property, which is usually lower than the market rental value.

Rental value (and thus the percentage) also reflects the location and type of property.

The assessment rate is tabulated based on a percentage fixed by the state government. For Shah Alam, rates vary from two to 7.5%.

For residential properties, the rate is 4.5% while a vacant plot for housing is 4%. Buildings and vacant plots meant for commercial purposes are taxed 7%, while industrial properties’ rates are set at 7.5% and 7% if it is vacant land intended for industrial use.


Property owners in Petaling Jaya Utara pay the highest rates, at eight per cent. The above houses are in Damansara Jaya which is among the housing areas in the constituency.
Agricultural land enjoys the lowest rates, at 2% a year.

Assessment fees are collected biannually and should be paid by Feb 28 for the first half of the year and Aug 31 for the second half. Ratepayers who fail to meet the deadline will be fined 5% of the total amount due.

Errant ratepayers are issued a notice called an E Form, informing them that they are required to pay within 15 days of issuance of the notice.

If payment is not received, Shah Alam City Council (MBSA) will issue a warrant (F Form) with an inventory and notice (G form).

If payment is still not made after seven days from the date the G Form is issued, the council can seal or seize moveable assets in the premises. The cost of hauling and storage will be borne by the property owner.

The council can also auction off seized items at any time deemed suitable, and the cost of the auction will be charged to the property owner as well.

Under Section 156 of the Local Government Act 1976 (Act 171), the city council can also take legal action against the property owner.

Property owners can pay their assessment bills at the payment counters of MBSA, TNB or Telekom, post office and banks or pay via online banking, credit and charge cards, automatic banking or Eazyway kiosks.

If ownership of the property changes, the city council has to be notified and provided with a copy of the grant of Sale and Purchase Agreement within three months of the transaction.

If the property is inherited, the new owner must submit the J Form together with a copy of the death certificate or grant within a year upon the death of the original owner. Failing to do so could lead to RM2,000 fine or six months imprisonment or both.

Property owners in Shah Alam who are unable to lease out their properties can claim for refund in assessment charges.

Under Section 162 of the Local Government Act 1976, the owner can request for a refund by submitting a vacant notice to the council, within seven days from the day the assessment fee is demanded.

MBSA assistant public relations officer Shahrin Ahmad said the refund could only be considered if the premises met all the required conditions.

“The claim can only be made if the premises has been left vacant (unable to lease) for more than a month,” he said.

The owner has to show evidence that the premises is fit for occupation and prove that he or she has tried all avenues to lease out the property by showing a copy of the classified advertisement or a letter from a real estate agent.

The application has to be made before July (for the first half of the year) and January (for the second half).

The receipt for the payment of assessment has to be submitted with the refund claim.

The claim is only valid on a term basis, so another application has to be submitted for the next term. Successful applications will be notified by mail.

Ratepayers who are disputing the assessment charged on their properties can file an appeal with the city council. Most owners had appealed for reduction due to change in land status.

The appeal hearing will be held at least one month before the assessment deadline. Usually, the city council hears between 200 and 300 cases per term.

SUBANG JAYA

Subang Jaya Municipal Council (MPSJ) uses two different valuation systems to determine rates in different areas of the municipality.

Formerly known as the Petaling District Council, it was upgraded to a municipal council in 1997 and inherited two major areas – Subang Jaya and Bandar Sunway from MPPJ.

These two areas are assessed using the valuation rates of 1992. The rest of the new municipality is assessed using the council’s 1996 valuation system.

Due to its urban location, all properties, including land, in Bandar Sunway and Subang Jaya are assessed at a uniform 8% rate regardless of whether they are classified as housing, commercial, industrial or agricultural.

In Puchong, Seri Kembangan, USJ, Kampung Bukit Lanchong and Putra Heights, rates for housing property is five per cent, commercial and industrial properties are at 6%t and agricultural land at 2%.

Bills for the second half of the year were sent out in July. Ratepayers have until Aug 31 to pay up.

MPSJ was one of the earliest among local authorities in Klang Valley to implement Internet payment facility. There are also other modes of payment available, including electronic banking, direct debit and auto billing.

Those who prefer the old fashion way of paying at a counter can do so at post offices, the MPSJ head office in USJ 5 and branch offices in Puchong and Seri Kembangan, as well as in Carrefour Subang Jaya and Tesco in Puchong.

Over RM58mil in assessment is owed to MPSJ since 1997. The bulk of this is due to commercial and industrial property owners. MPSJ has started a lucky draw drive at its counters in Tesco and Carrefour to encourage ratepayers to pay up on time.