By: Rosli Mansor Ahmad Razali
Ipoh: The proposed increase in property assessment tax by the Ipoh City Council (MBI), set to take effect on July 1, 2025, has raised concerns among property owners in the city.
Dr. Richard Ng, President of Ipoh City Watch, voiced his concerns over MBI’s approach, which he views as disproportionately high compared to the value of properties and existing facilities in Ipoh.
While MBI justifies the increase by stating that the last tax review was over 40 years ago, Dr Richard emphasized that the new calculations should be more realistic and transparent.
“MBI should base the tax rate on the actual rental value of properties and improve amenities to attract investment, instead of burdening long-time property owners already struggling with rising living costs.
“Each city in Malaysia develops at different rates, but Ipoh lags behind cities like Melaka, Seremban, and Shah Alam. Even though MBI claims the last tax review was in 1981 with a rate of 16.5%, they are now seeking to increase it to 30%,” he said.
MBI collects over RM145 million annually from property assessment tax, a figure expected to rise to RM160 million next year. Dr. Richard stressed that the public has a right to know how this tax revenue is being used.
Despite rising property prices, he argued that the tax hike should account for factors like location, infrastructure, economic activities, and available amenities.
“Property owners in Ipoh are receiving notices of tax increases ranging from 4% for villages, 5% for new villages, and 9% for housing estates. The tax calculation method based on future rental estimates needs clarification, and MBI is advised to assess the actual rental rates for each area,” he added.
As an example, in Shah Alam, the rental rate for a double-storey terrace house is between RM1,200 and RM1,500 per month, with a tax rate of 3.45%. The sale price for a similar house in Shah Alam is about RM800,000.
In comparison, rental rates in areas like Desa Tambun Indah in Ipoh range from RM350,000 to RM500,000, with a monthly rent of only RM1,000. The new assessment tax rate of 9% is much higher than that in Shah Alam.
Therefore, properties that have been renovated without changes in floor size should not be subjected to higher taxes. MBI must improve services and amenities to attract investment to Ipoh.
He also raised concerns about transparency and called on MBI to disclose how the collected tax revenue is being spent.
“Taxpayers are concerned that the new tax will become a burden if subsidies are removed, as seen with subsidies for diesel and RON 95. Will the government consider B40, M40, and T20 groups after this?” he asked.
The proposed new tax rates are 15% for residential properties and 18% for commercial premises after subsidies, not the previously stated 9%.
“We propose that the new rates apply only to newly developed properties with complete facilities, while older properties requiring maintenance should not face the same tax increase,” he said.
Dr. Richard urged taxpayers to protest the proposed tax hike and suggested that MBI use the collected tax revenue to improve infrastructure, including drainage systems and recreational facilities for the elderly and the disabled.
“Taxpayers should provide evidence of actual rental rates and the condition of their estates during the hearing sessions. In three years on the Property Tax Complaints Committee, I have not seen any appeals approved by MBI,” he concluded.
