Revision of property value essential to finance rising cost of services, says Ipoh councillor

 

While it reviews the valuation of properties with a view to raising its collection of assessment tax, the Ipoh City Council is also reducing the tax rate. (File pic)

PETALING JAYA: 

Local councils have to conduct regular property valuation exercises to enable them to continue providing the same level of services, according to an Ipoh city councillor.

Chemor Zone city councillor Faidz Ismail said that while the cost of services such as paving roads, patching potholes and even installing lights has risen, property owners continue to pay the same amount in assessment tax each year.

The amount collected in assessment tax is based on the prevailing sum in annual rental that each property can fetch.

The last time the Ipoh City Council (MBI) conducted a valuation exercise was in 1982. “It has not been updated for 42 years,” Faidz pointed out to FMT.

He said even if the tax rates do not rise, property owners might still have to pay more based on the increase in the value of their holdings after the review.

In fact, he said, the tax rate for residential and commercial properties has even been reduced.

“Previously, the rate was 16.5% for both categories of property but the rate is now being reduced to below the proposed 9% rate. In certain areas, such as villages, it is as low as 6%,” he said.

He said any increase in the assessment as a result of higher valuations would be mitigated by the reduction in tax rates.

Media reports indicate that there has been a groundswell of protest from Ipoh residents over the expected increase in the amount they have to pay in assessment.

MBI has since agreed to further reduce the assessment tax rate to below the proposed rate of 9%, despite only 18,000 out of 319,000 property owners submitting objections before the Nov 22 deadline.

Mayor Rumaizi Baharin said the rate, which will be implemented in July 2025, would be lowered “a little more”.

Faidz, who also sits on the council’s valuation objection sub-committee, said the MBI has introduced a mechanism to cap any increase in valuation to 15%.

He also gave an assurance that the level can still be adjusted based on what transpires in upcoming discussions.

The final decision on the review of the valuation will be made in April or May 2025.

Faidz said that once a decision has been made, councillors in Ipoh will host town hall meetings to explain to the residents how the value of their properties will be determined. - FMT