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Quit rent, parcel rent and assessment rates are among the cost of home ownership that should be noted. As a homeowner, it is important to know and be aware of matters related to your household financial planning. Basically, once you buy your home tied to such expenses and charges. If you are still unclear about these taxes, this article will help explain all three property charges.
What Is Quit Rent, Parcel Rent and Assessment Rates?
Many homeowners who often overlook are not aware of quit rent, parcel tax and door taxes. In fact, many tend to ignore these real estate taxes when managing their property. You may have heard or read news of a homeowner who is subject to decisive action such as seized land, kicked out of the house, household goods and so on. Therefore, it is important for you to know what matters related to land tax, parcel tax and door taxes to prevent this from happening to you.
In short, land tax is an annual land tax imposed on private properties while compartment tax is a tax imposed on stratified property – both payable to the State Authority. Meanwhile, assessment or door taxes are collected by local authorities to finance the construction and maintenance of public infrastructure.
1. Quit Rent
What is land tax? Land tax is a tax imposed on land owners on land (landed houses) consisting of freehold homes, leasehold and strata real estate. According to Section 95 of the National Land Code 1965, the law is required for all registered homeowners or representatives to explain land taxes. Basically, all matters pertaining to land tax payments are your responsibility once the sale and purchase agreement has been signed between you and the seller.
Most states have set a deduction date for homeowners or real estate to explain land tax payments on May 31 each year. Therefore, you need to be aware and know about this as action can be taken against you if it is slow to explain land tax. You will have to pay the land tax to the state’s Land and Mines Office (PTG) in the state.
How to Calculate Quit Rent
This land tax is evaluated and imposed by your State Government through their respective State Land and Mines Office (PTG). Your state ptg will evaluate your property and charge you you need to explain every year. You have to pay your land tax every year as long as the property is under your ownership. For example, you have sold the house but you do not transfer property to the new owner. In this situation, you are responsible for explaining the land tax for the property.
To find out your land tax rate, check with your PTG and your state government as each state may impose different rates for the same property size. For example, the rate of land tax calculation in Kuala Lumpur may differ from the calculation in Negeri Sembilan. Land tax calculation is made according to the amount of land calculated as part of your property.
Each square foot of the land on the property will be evaluated. For example, gross count rates in Kuala Lumpur are usually charged at RM0.035 per square foot. Let’s say your property has 2,000 square feet, the tax will be RM70.
How to Pay Quit Rent Online
As a real estate owner, you need to explain this tax to your state government. With online land tax payments, you can easily and easily pay land taxes online. You need to sign up by entering the details first before you can log in. Here is how to make online tax payments:
1. Visit the Relevant state land registry office website:
| State | Online Payment Link for Quit Rent |
| Selangor | https://ehasil.selangor.gov.my/app/search |
| Kuala Lumpur | https://www.ptgwp.gov.my/etanah-awam/EBayaranSemakBayarCukaiTanahForm.xhtml |
| Negeri Sembilan | https://e.ptgns.ns.gov.my/ |
| Melaka | https://ebayar.melaka.gov.my |
| Johor | https://onlinepayment.johor.gov.my/ |
| Perak | https://ptg.perak.gov.my/etanah-awam/ |
| Perlis | https://ptg.ptgps.gov.my/esemakan/ |
| Kedah | https://ebayaran.ptgkedah.gov.my/ |
| Pulau Pinang | https://ebayar.penang.gov.my/ |
| Pahang | https://fpxptg.pahang.gov.my/fpx/fpx_qrycukai.php |
| Kelantan | https://hasiltanah.kelantan.gov.my/ |
| Terengganu | http://cukaiptg.terengganu.gov.my/esolarweb/main.php |
| Sabah | http://www.quitrent.jtu.sabah.gov.my/ |
2. Log in your account or enter your account number
3. Then, click on ‘Review and Quit Rent Payment’
4. To make payments, you can choose the payment method you want through several online banking applications such as Maybank2u, Cimbclicks, RHB Online or Pos Malaysia app.
5. Upon completion of the payment, make sure you print or download the receipt for your reference
2. Parcel Rent
What is the purpose of the parcel rent? Parcel rent is a tax imposed on strata or strata houses subject to the Strata Management Act (SMA) 2013 and the Strata Title (STE) Act 1985. Generally, it refers to the type of property that has been divided into compartments such as condos, townhouse, apartments , controlled communities and so on.
Under the old system, land taxes are imposed on strata property through the Joint Management Agency (JMB) which incorporates these charges into maintenance fees to the homeowner. This will cause the owner of the strata property to sell or transfer the ownership of the parcel unit will be in trouble if the land office record indicates that the owner of the other ‘parcel’ on the property still does not pay their taxes.
Because of this, the new quit rent was created for strata properties in Selangor known as parcel or parcel rent in June 2018. The purpose of this change is to facilitate the sale and transfer of strata property property. Under this new square tax, the charges will continue to be billed to the homeowner and not through JMB.
State PTG will be able to monitor and identify the owner who does not pay the parcel tax better through the parcel tax system. In this way, strata real estate owners who want to sell or transfer real estate can do more easily. In addition to Selangor, Penang and Kuala Lumpur have also implemented this parcel tax system.
3. Assessment Rates
What is an assessment tax? The assessment tax is a tax collected by the Municipal Council of your property location. Also known as door tax, this type of tax is a local land tax imposed on homeowners to cover the cost of financing the development and maintenance of local infrastructure and services such as:
- Maintenance of road side lamps
- Cleaning of a public park
- Municipal waste collection such as garbage
- The construction and maintenance of public infrastructure
- Other jobs to make your home better and comfortable
Regardless of your home is an undercon house, a subsale or affordable home, you are obliged to pay this assessment or door tax every year. This is because, it is a compulsory payment imposed on all residential and commercial real estate owners.
However, if your property is vacant or not occupied, you can apply for a remission claim from the local authority. The main requirement that you must meet is that the application must be made within seven days from the vacation date. Otherwise, the Local Authority will calculate the date the property is vacated on the date the application is made. In addition, there are some states that offer these assessment or door tax exemptions for low and medium -cost housing. You can first check if you are eligible for the exception.
Assessment Rates in Malaysia, Pay Your Assessment Rates Online
To your knowledge, assessment taxes are calculated based on the gross estimates of the annual property rent by about two percent to seven percent. The charged value varies depending on the size and type of your property. For example, low -cost flats are charged lower than charges charged on two -storey terraced houses. You need to explain this assessment tax payment to the relevant Municipal Council such as MBSA, DBKL, MBPJ, MPKJ, MPSJ, MPSP, MPAJ and so on.
The assessment tax must be paid twice a year:
- First term – January 1 to February 28
- Second term – July 1 to August 31
Are These Taxes Mandatory? What Happens If You Don’t Pay Your Quit Rent, Parcel Rent or Assessment Rates?
In addition to considering home-related costs such as home deposits, housing loans, home insurance, property owners are required to pay quit rent, parcel rent and assessment rates under the Malaysian legal system. Therefore, you need to make sure you explain these three taxes as firm action will be taken by the State Government and the Municipal Council against you. Here are the consequences if you neglect the responsibility of paying these taxes:
- A arrears notice will be issued to you if you are slow to explain the payment. The notice will tell you about the arrears and fines that will be imposed on you.
- If the payment has not been cleared after the arrears notice is issued, the State Government and the Municipal Council reserves the right to issue a warrant of arrest against you and impose a fine due to the warrant.
- Once you have received a warrant, the authorities may take legal action, seize any property that may be seized from the house and auction of the house or land involved.
You have to pay these taxes once you buy a home and own the property. As explained above, you will be charged a penalty and legal action if you fail to pay the proper payment.
Perform Your Responsibilities as a Homeowner
Hopefully this article will help you carry out your responsibility to pay taxes as a real estate owner. Undoubtedly, owning a home is a huge responsibility and you need to be financially prepared. As a real estate owner, financial planning is very important because the cost of home ownership is higher than monthly payments, home insurance such as MRTA, MLTA, MRTT and MLTT, flood house supplements to the taxes described in this article.
Also, if you are planning to get the best home insurance, buy car insurance or online motor insurance, visit the Qoala website for more info. Qoala provides several insurance options from some of the best insurance companies in Malaysia for you to choose from!
