Penang MCA urges state govt to review quit rent hike

Penang MCA has hit out at the state government's decision to gazette new land tax rates across multiple land categories, effective from Jan 1, describing the amounts as "insensitive and reckless".

State MCA chairperson Tan Teik Cheng warned that the increase – ranging between 29 percent and 200 percent – would worsen the financial strain on more than 370,000 landowners from residential, agricultural, and religious institutions.

“Although the chief minister claims this move is overdue after 31 years, the timing and scale of this hike are clearly out of touch with the economic difficulties confronting Penangites.

"It also runs counter to Pakatan Harapan’s pledge to alleviate the cost of living,” Tan (above) said in a statement today.

Yesterday, Penang Chief Minister Chow Kon Yeow announced the percentage increase for the rural housing category was 127.27 percent and for urban areas 29.63 percent, while for the industrial category, the increase for urban areas was 151.94 percent and for rural areas 200.93 percent.

The announcement was made under Section 101 of the National Land Code (Act 828) through the Penang State Government Gazette No. 37 dated Sept 11.

However, the land tax review does not involve 300,000 strata parcel tax accounts, and owners will continue to pay strata parcel tax at the existing rate.

Potential impacts

Elaborating, Tan cited potential impacts from raised taxes, including increased food production costs; increased costs on the local meat supply chain; and a minimum RM50 per lot tax for mosques, non-Muslim places of worship, and cemeteries.

"Although the state government has offered temporary discounts for 2026 to 2028, it does not fully address the concerns of low- and middle-income families, small farmers, and faith-based organisations who may struggle with these increases and whose income is largely derived from donations," he argued.

Tan said MCA proposed that the Harapan-led state government conduct a comprehensive review of the new rates in consultation with affected communities and implement hikes with fairness and affordability as the guiding principles.

"Provide exemptions or stronger discounts for small-scale farmers and low-income households.

"And withdraw the RM50 rate imposed on houses of worship and cemetery land," he said.

"The Penang state government needs to remain open to feedback, lest it risks being labelled as an implacable tone-deaf administration.

"It must also ensure that development and revenue collection do not come at the expense of the very people it seeks to serve," he said.

To reduce the impact and financial burden on all landowners, Chow previously said a mechanism for 32.5 percent tax payment rebates to all landowners will be implemented in 2026, followed by a 20 percent rebate in 2027 and a 20 percent rebate in 2028.

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