Looks like the Tiger is being tamed financially as some cheers are in store for owners of flats and condominiums, and as well as property developers in the city. The cheers come in the form of discounts. For the owners of flats and condominiums, there is a 6% discount on their annual assessment, while for the property developers a 45% discount on land premiums.
Flat and Condominium owners had till last year paid 16% assessment on the estimated value of their properties on par with owners of other dwellings. Now, they need to pay only 10%.
Translated into cash, there will be a saving of between RM100 and RM600 annually for each unit of flat or condominium. About 11,000 owners in the city are eligible for the discount.
“Since many of the owners are paying management corporation charges to cover the cost of maintaining common areas, in addition to assessment rates, the reduction of assessment to 10% by the Perak State Government is fully appreciated by all concerned”, commented Dato’ Francis Lee Yew Hean, chairman of Real Estate and Housing Developers’ Association (REHDA) Perak Branch.
According to him, there are currently about 250,000 units of rateable holdings within the city. They consist of vacant lots, residential, industrial, new and traditional villages and planned kampong lots. “As there are only about 11,000 units of flats and condominiums within Ipoh City Council, representing as 4.4 % of total rateable holdings, this reduction will have minimal effect on the total assessment revenue of the Ipoh City Council. “The reduction of assessment for the flats and condominiums from 16% to 10% or a 37.5% reduction will only translate as a short-fall of some 1.65% of assessment payable to Ipoh City Council”, said Dato’ Lee, adding, “The members of REHDA, Perak Branch, would wish to record our sincere appreciation to the Perak State Government for the timely decision on the following policy matters which would provide further enabling factors to promote the development and industrialization of Perak.”
On the short-fall to the revenue due to the discount, Ipoh Mayor Datuk Roshidi Hashim said “the council would find other ways to ensure our financial standing remains healthy”. Datuk Roshidi, who announced the discount for the assessment at the council’s full board meeting recently, said those eligible for the discount should not be confused by the notice sent to them earlier. The council would make the adjustment when they come to pay the assessment.
The discount for this category of owners was decided by the Perak Government following an appeal by REHDA and other main NGOs to the city council, which was passed on to the state government for approval. In most cases, the owners of the high-rise buildings need to pay management charges as much as RM200 a month to maintain their surroundings which include maintaining premises, roads and street lighting, clearing drains, landscape and gardens and collection of rubbish to a common collection point. Hence this category of residents does not require the same facilities as those provided by MBI to residential properties. Generally for most locations the main service provided by MBI is the collection of rubbish from a common point.
Those who will benefit from the assessment discount are appreciative of it. They said that the saving from the discount would cover some of the monthly payments to the management corporations. Condominium owner Joseph Loh, who lives at Bercham Prima in Bercham, is pleased with the reduction. However, he added that it would be “nicer if the rate could be further reduced to 5% as per the rate at his other unit in Puchong, Selangor”. Another condominium owner Andrew Leong declared the reduction as “good”. “Nowadays any price reduction is hard to find and if there is no loss in quality, it is most welcome.”
On the discount to premium payable on land to the State Government, Datuk Lee said that since the Valuation Department effected a change in the method of calculating the market value of a given piece of land for the purpose of premium payment, premiums payable took a hefty jump. The previous practice of determining the unit cost of the land which was based on total gross area had been substituted by the adoption of nett area. The effect of this change had resulted in an increase of premium payable varying from 100% to 200%, depending on the nett area available for development.”We are grateful to the State Government for the blanket 45% discount on all premium payable in response to an appeal by the main NGOs in Perak,” said Dato’ Lee. The discount represents a stop-gap measure and the State Government is now reviewing the formula for calculating premium payable, with the understanding that the leviable premium shall remain status quo.
Commenting on the decision, Menteri Besar Datuk Seri Zambry Abdul Kadir said the Valuation Department’s move to adopt the nett area instead of gross area in the calculation of land premium had resulted in far higher premiums for land applicants. He said after discussing with various parties, the state executive council decided to offer a 45% discount on land premiums. The discount was in line with the state’s policy to look after the welfare of the people. “On one hand it is good to increase the value of the land but on the other, it may not be good for development. It would especially burden developers and land owners as they would have to pay an exorbitant price for land premium”, he said.
According to Zambry, the state’s focus now is to encourage development and therefore they do not want this to hamper any housing projects or industrial development.