GEORGE TOWN: The Penang state government has officially gazetted new land tax rates that will take effect from January 1, 2026, affecting nearly 370,000 land titles throughout the state.
Chief Minister Chow Kon Yeow confirmed that the revised rates received approval from the National Land Council 2024 and will remain unchanged for a decade until the next review.
Residential properties in urban areas will see a 29.63% increase, while rural housing faces a 127.27% hike, with industrial land taxes rising by 151.94% in urban zones and 200.93% in rural locations.
The urban residential tax rate will increase from RM0.54 to RM0.70 per square metre, with a minimum payment of RM70 per lot applicable in areas including Jelutong, Tanjong Bungah, and Bayan Lepas.
Rural residential land tax will rise from RM0.22 to RM0.50 per square metre, carrying a minimum payment of RM50 per lot for properties across the state.
Owners of residential land smaller than 100 square metres will pay a minimum annual tax of RM7 in urban areas or RM50 in rural locations, covering low-cost and affordable housing schemes.
Industrial land tax increases to RM3.25 per square metre uniformly, while business properties face rates of RM3.25 in urban areas and RM2.80 in rural zones with minimum payments between RM280 and RM325.
Agricultural land sees varied increases with paddy fields rising to RM15 per hectare, oil palm plantations to RM99, rubber estates to RM75, fruit orchards to RM80, and cash crops to RM40 per hectare.
Durian cultivation introduces a new rate of RM800 per hectare, while livestock and aquaculture operations face increases between RM250 and RM750 for the same area.
Special category rates include golf courses at RM2,500 per hectare, quarries at RM3.25 per square metre, and federal government land at RM0.54 per square metre.
Mosques, non-Islamic places of worship, and cemeteries will pay a nominal rate of RM50 per lot under the new structure.
Village houses receive a new fixed rate of RM50 per lot regardless of land size to prevent financial burden on homeowners in this category.
Over 200,000 land titles without specific categories will now be taxed based on current land use, addressing decades of revenue leakage for the state government.
The state will implement rebates of 32.5% in 2026, 20% in 2027, and 20% in 2028 to reduce the financial impact on landowners across all categories.
These rebates will result in annual revenue reductions of RM80 million to RM100 million for the state government during the three-year period.
Current land tax revenue of RM140 million to RM145 million is expected to exceed RM200 million next year and reach over RM400 million by 2029 after rebates expire.
The government will also waive 100% of fines on outstanding land tax and parcel tax arrears from January to December 2026, involving RM25 million in penalties.
The announcement was made under Section 101 of the National Land Code through the Penang State Government Gazette dated September 11, excluding 300,000 strata parcel tax accounts. – Bernama