A Simple Guide To Quit Rent, Parcel Rent, And Assessment Rates
Quit rent, or 'cukai tanah', is a form of land tax collected by your state government for property in Malaysia. Assessment rates or 'cukai pintu', is a local land tax collected by local councils to pay for developing and maintaining local infrastructure and services.
These two payments form part of Malaysia’s land tax system. The owners of qualifying properties are legally liable for these charges under Malaysia’s established system of law.
Who Has To Pay The Quit Rent?
Quit rent is imposed on owners of any landed property in Malaysia, which includes both freehold and leasehold land.
It's assessed and imposed by the local state government, via the country’s Land Office
Quit rent also applies to strata buildings. This payment has traditionally been charged to the Joint Management Body (JMB) of these buildings, who pass on the costs through maintenance fees.
Recent changes indicate a shift towards including this land tax as part of a separate charge billed direct to owners.
The National Land Code sets out in law the obligation of all landed property owners to pay quit rent annually to the relevant Land Office.
Each state will have a set date by which Quit Rent must be paid, although most states operate on a 31 May cut-off.
Of course, if you live in Sarawak, you enjoy a happy bonus! Quit rent was abolished for residential owners in the state in 2016.
How Much Quit Rent Do I Have To Pay?
Landed Property
Quit rent is assessed as a chargeable rate related to the total amount of land included as part of a property. In other words - it is assessed per square foot of landed property.
That means it’s important to check your own quit rent rates with the relevant Land Office (or your state government) to understand what you might have to pay.
If you’re looking for a guideline figure – a landed property in Kuala Lumpur has historically been charged at a rate of RM0.035 per square foot.
So a 2,500 square foot property would have a chargeable quit rent of RM87.50. Quit rent is unlikely to be more than RM100 for most properties.
Strata Title Property - Parcel Rent
Quit rent also applied to strata properties, which are properties that are organised by splitting said properties into ‘parcels’.
This usually refers to apartments and condominiums, but some types of landed properties may fall into this category too.
While purchasers are the owners of their ‘parcel’ under this arrangement, common areas like swimming pools are still owned by the developer.
For strata properties, the quit rent used to be charged to the joint management body (JMB) of these properties, who pass on the costs through maintenance fees.
However, in June 2018, a new land tax was created for strata properties in Selangor to replace the quit rent, called parcel rent. This new parcel rent is now a separate charge billed directly to owners.
This change was created with the intention to ease the sale and transfer of ownership of strata properties.
Under the old system, any owner who wants to sell or transfer the ownership of a parcel would run into trouble if the Land Office records show that other parcel owners in the property have not paid their quit rent.