What is parcel tax? This is effective from 1st January 2020 onwards. This is considered a new name for quit rents for strata buildings. Of course, change of just the name is not all that changed yeah. Federal Territories Minister Khalid Abdul Samad says that parcel tax will be more transparent and allows owners to pay directly to the Federal Territories Land and Mines Office instead of paying to the management committees (MC). (I think what he meant is that owners will now know immediately if they have paid or not because they will get the receipts directly versus waiting for it if they were to go through the MCs)
Article in nst.com.my here. This is a good news for the B40 households who owns a strata property here in Kuala Lumpur REGARDLESS of size. The homes are those from the low-cost housing schemes and the People’s Housing Programme. They will now only need to pay a yearly flat rate of RM15 for leasehold property or RM20 if they have a freehold property. One major reason to switch is also because there are just too many ‘unpaid’ quite rents.
Khalid explains, “Based on current records at the Federal Territories Land and Mines Office, about 446 strata development schemes out of 3,214 (or almost 15 per cent) in Kuala Lumpur have quit rent arrears. Implementation of the parcel rent system is seen as a correctional mechanism and to rationalise taxation mechanism to a more systematic, transparent and fair strata development.”
He also explained that the calculation formula under the parcel rent system was based on the total area of the parcel, including the owned accessory parcel, parcel utilisation category for residential, business or industry, and whether it was leasehold or freehold.
As for the M40 households, he said, “Based on record, there are more than 70 per cent of affordable-type apartments with 1,030 per sq ft or 96 per sq metre, and the owners are mostly the M40 group. Therefore, the parcel rent rate for such strata development has been drafted to allow the implementation of parcel rent for a minimum rate of RM20 a year for leasehold title and RM25 for freehold title holders can be enjoyed by the M40 group of the strata residential owners.” Please refer to the article Article in nst.com.my here.
By the way, I always believe the fewer middlemen, the better it is for transparency and efficiency. I will always remember how passport applications could be way faster if we pay EXTRA. This is a thing of the past. Today, it’s ready within an hour and the only payment is for the passport itself without any ‘extra’ payments to some middlemen with connections for example.
Now, for that next phase? Making sure the strata owners actually PAY. There are no improvements if there are no enforcements. Earlier article about it here: You pay, else we will seize your land and your home We always talk about how some countries are better etc, I think IF the people refuses to pay on time and we do nothing about it, stop talking about all these potential improvements. There are certainly countries where the people will just pay without any need for coercion. One day, all Malaysians will be like that. Till then, strict enforcement will be necessary. Happy paying for that parcel tax yeah.
Next suggested article: If you leave it empty, I will tax / charge you