Former Housing Minister: Penang State Govt Could Consider Raising Taxes on Luxury Apartments

Former Minister of Housing and Local Government of Malaysia Dato’ Seri Reezal Merican Naina Merican suggested that the state government could consider raising the tax rate for luxury apartments and high-end commercial units by reviewing the unit tax (cukai petak) in the future.

According to Kwong Wah, the idea is that those who can afford these high-end properties should pay more in taxes.

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“It’s time they explore a more progressive land tax system”

Reezal argued that Penang is now packed with luxury apartments and high-end commercial units, with property and market values higher than in other states, yet the tax rates remain much lower than those in Johor and Selangor.

“Even though the last unit tax review was done in 2019, the next one isn’t until 2029. The state government should consider increasing the rates when that time comes. It’s time they looked into a more progressive land tax system, but still keep the lower-income groups in the suburbs in mind.”

He also mentioned that under Section 101 of the National Land Code, state governments can review land taxes every 10 years and suggested that Penang could compare with other states or even other countries to find a better way to structure its taxes.

“A rich state doesn’t mean its government is”

Reezal added that even though Penang’s per capita income ranks third in the country, just behind Selangor and the Federal Territory, he pointed out,

“A rich state doesn’t always mean a rich state government. The government needs to boost revenue and cut costs by setting clear goals and restructuring how state-linked companies operate so they can really help bring in money.”

He gave the example of Johor Corp, which brought in RM70 million for Johor, and Selangor’s profitable PKNS.

“Therefore, I suggest Penang’s government-linked companies under the Chief Minister’s Office explore new business areas like solar agriculture and floating solar projects in renewable energy to grow their earnings.”

Reezal also urged that it’s time for the Penang Development Corporation (PDC) to think beyond Penang and start expanding its business horizons.

Also read: Properties in High-Demand Areas Like Kuala Lumpur & Petaling Jaya Set for Price Hike This Year