Playing with Figures

Editor’s Desk

By Fathol Zaman Bukhari

I have all along thought that assessment rates house and property owners pay at the beginning of the year are being determined by local authorities based on a number of factors. Prevailing property value being numero uno while location, affordability and economic situation being complementary. But you cannot simply raise the rates based on your better judgment, can you?

This seems to be the case with Ipoh City Council who has notified residents of Taman Cempaka and Taman Desa Cempaka that a hike in assessment rates is in the offing. Notices have been sent to nearly 10,000 households in both housing estates warning them of the new rates, which will take effect beginning July 1.

While the law is explicit about the rights of local authorities to raise taxes Ipoh City Council should not make an arbitrary decision without prior consultation with the affected parties. Granted that the last property valuation was made in 1980s and nothing has been done since, the suddenness of the whole exercise is baffling.

It could not have come at a worse time. The obnoxious Goods and Services Tax is barely three months old. Price of petrol has gone up by ten cents and the country is bracing for a possible economic backlash, which will impact Malaysians in no small way. We are already beginning to feel the effect of our shrinking ringgit, which is now traded at almost three ringgit to a Singapore dollar.

The country’s economic fundamentals, although being touted as “heavenly” by Idris Jala, the Minister in the Prime Minister’s Department, are definitely not good. That is why our ringgit is nose-diving into the abyss. Conditions may be far worse than the 1990s financial crisis when many small businesses went belly up and the ringgit had to be pegged at RM3.80 to the American dollar. Not wanting to be a doomsayer, I can only speculate. It is like looking into the crystal ball – an opaque ball which does not tell me much.

Ipoh’s annual chargeable rate, at 16.5 per cent of property value, is the second highest in the country. Only Kuching hovers over us at 24 per cent. Yet the apologists from among us believe that the rate is reasonable as a half point increment was only made last year. The 16.5 per cent is peanuts, they said implying that it was perfectly right for the Council to raise the annual rate as the increase was negligible.

I was in Taman Cempaka recently and met with the disgruntled residents. Their problem is real. They were literally up in arms and had pleaded with the Adun for Canning, Wong Kah Woh to help them untangle the mess. The proposed rates are not uniform as they are supposed to because the value of their properties has been marked up to reflect true market value at this point in time.

Although the annual 16.5 percentage rate remains it makes little sense when divided with the estimated property value. One resident’s house is valued at RM30,960 when its current value is only RM2700. The poor chap now has to pay RM5108.40, an increase of RM4662.90 over his current rate of RM445.50, a mind-boggling 1150 per cent appreciation! This is madness. Can’t they count?

A provision is made in Local Government Act 1976 for those who dispute the proposed property value to challenge its validity; they have to write in personally to the Council within ten days upon receipt of the notice. Wong Kah Woh is taking up the case with the Council.

In 2004 a proposed reduction of the annual chargeable rate from 16 to 10 percent was made, however properties were to be assessed at market value. This got shot down as it would mean an increase in assessment rates by between 20 to 30 percent. A similar scenario is being played out here. This time around annual rate remains at 16.5 percent but property value is to be estimated not at market value but the Council’s better judgment. So you have people paying different rates for different categories of properties. This is daylight robbery.

In a written statement to the media, the mayor revealed that 16,409 notices were issued to property owners in Tanjong Rambutan, Taman Perpaduan, Tambun and Taman Cempaka. The revaluation exercise involved 19,193 households in 67 housing schemes and estates. The reasons given were varied, changes in land value and status being the major considerations. But it was silent on the timing and the need to re-evaluate. May be the Council is in dire need of funds to make Ipoh the most “livable city in the country”. As a rate-payer, I am preparing myself for the worst.

Well, bubur lambuk is still being distributed free of charge. I shall soon join the queue.

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