Nov 20, 2013

    KL plans sharp hike in tax on homes

    In Kuala Lumpur

    The Business Times

    KUALA Lumpur property owners, an estimated 10-16 per cent of whom are foreigners, are facing sharply higher assessment payments of up to 300 per cent, following the latest move by City Hall (DBKL) to boost its coffers.

    DBKL's "Notice of revision of valuation list" has been posted to home owners, detailing the proposed annual value on which assessment is payable.

    In the popular Mont Kiara area, for example, a serviced apartment of about 1,100 sq ft, whose annual valuation last year was RM15,600 (S$6,000), has now been assessed at RM30,000.

    Consequently, the annual assessment payable will jump to RM3,600 from RM1,872 - a 92 per cent hike, given that serviced apartments and other properties with commercial titles attract a 12 per cent tax. The residential rate is half that level, at 6 per cent.

    Lawmakers, inundated by their constituents' requests to fight the hike, reckoned that assessments would go up by 100 to 300 per cent.

    But DBKL maintained that the hike is justified because valuations have not been revised for 21 years, even as property values and the council's operating costs have gone up significantly.

    Ratepayers countered that revisions ought to be more gradual, like every five years.

    Furthermore, owners - many of them retirees - said that they do not benefit from higher property values as most occupy their homes, and believe that the proliferation of new developments should have added to DBKL's revenues.

    Slamming the council for its lack of consultation, they complain that its services have not improved. Roads continue to be full of potholes and drains remain clogged, while many parts of Kuala Lumpur are dirty.

    The fault does not entirely lie with DBKL as, quite often, a newly resurfaced road is damaged when a utility company lays down new water pipes or telco cables, and its independent contractor does a shoddy patch-up job.

    In a column, tycoon Tong Kooi Ong wrote that DBKL's expected total revenue for this year of RM1.62 billion more than covered the RM1.4 billion budgeted in operating expenses.

    Although it anticipates incurring RM782 million in development expenses, about half of it would be paid from federal-government funds. It is unfair to overly tax KL residents, as they also pay Putrajaya hefty corporate and personal taxes, he said.