Sunday, December 04, 2011

Remember to Pay Your Land Tax (Cukai Tanah)

In case you do not know, you need to pay the land tax (cukai tanah) once a year for all the properties that you own in Malaysia. However in some cases,  the land office doesn’t have the address information about you so they won’t send you any statement reminder.

This is especially true if you buy your new house or new property from the developer. By right, the developer should instruct the land office to change the address to your new house but this doesn’t happen to all the cases. So they can’t send you the statement as a reminder. You will have to update the address by your own at land office.

Anyway I checked with the land officer(for Kedah only), they told me even though they have the address, they won’t send out the statement as well. The homeowner needs to come the land office to pay for their land tax. Huh, what a crap? You will get the penalty too if you don’t pay and they also won’t send you any penalty statement as well. What a crap?

Assuming if you take the loan for 30 years, your land tax fee is RM80 and the penalty is RM20 yearly. So for 30 years, you will owe the land office RM3000. You will need to pay this when you want to settle your loan with the bank or else the bank will not release your house title to you. You also need to pay this this one shot if you want to sell your house.

This happened to me this year when I wanted to settle my loan but luckily it was only for 4 years so I did not need to pay a lot. Assuming for those who do not know about this, they will have to pay large amount of money including the penalty fees. Why we need to waste such money right?

Few Tips:
  • Make sure you pay your land tax (cukai tanah) every year if you own any properties. If you do not get any statement or make any payment for your land tax (cukai tax) before, I think it is better for you to check it out at the land office.
  • For strata buildings, you have 2 titles (i.e. Master title and Strata title). You have 2 payments to made. The first payment is land tax / quit rent (cukai tanah) for master title. The second payment is door tax (cukai pintu) for the Strata title. See note (1) below.
Note (1) : Master title refers to the land where the building the land is shared between the unit owners. The Strata title however belongs to the individual unit owner which refers to the door tax (cukai pintu) of which payment is not shared.

Hope this is something useful to share. I'm not sure what "Cukai Pintu" should be called in English, so I just call it "Door Tax" but it sounds funny. Please check your land tax (cukai tanah) payment with the land office if you haven’t paid a single cent before and the worst thing is you need to remind yourself to do such payment every year!

Also, this probably most applicable for those who has landed property because usually for Strata property, everything will be taken care by your property management and they will request you to pay for it.


Alvin Lim said...

yea, few of my frens who own properties don even know what is this tax since they've never received the letters :P

ChampDog said...

Hey Alvin, I noticed you have lost your blog data until October last year. Hope everything will be get back to normal soon.

Yes, that is the funny part. Why they don't just send out the statement?

So it is better for the homeowner to check unless they are okay to pay one lump sum and the penalty fee later.

Kris said... looks like they don't want to collect the money OR they want to collect MORE money when the penalty kicks in..haha.

Maybe it applies to Kedah only, as I always getting letters to pay land tax, etc. Too many letters.. T.T demanding $$$..

If you have multiple properties, pening oh...

LCF said...

Hey ChampDog this is good reminder. I always hear about my dad mentioning about cukai tanah last time, but yea, I never really seen a notice before!
For strata title, do you mean the mgmt will give u notice to pay or ask u to reimburse?

ChampDog said...

Yes, maybe for Kedah only. You seem like imply you have a lot of properties, receive too many letters. lol! :)

ChampDog said...

@LCF, for Srata title, there is a master title and it is shared by all the unit owners. The management of the apartment or the township will usually collect it from all the unit owners.

Then, there is a door tax or "cukai pintu" and you will received that from the town port office (i.e. Majlis Perbandaran) and that one which unit owner has to pay for their own.

I hope I remember correctly. Let me know if you don't experience this. :)

Anonymous said...

1) Cukai tanah - quit rent - under Pejabat Tanah (Land office)
2) Cukai pintu (kadaran) - assessment - under Majlis Bandaray/Perbandaran/Daerah (Local authority)
3) When u purchase a property, make sure your lawyer notify the local authority when you need to submit a copy of S & P and the latest assessment bill (the payment must be settle up to date)together with a form (changes of owner and address. I have seen a lot of cases where the assessent bills send to the previous owner's address or to the address of the property which is vacant/tenanted. I dun want to comment much on lawyer here.
4) As for quit rent, the land office will send their quit rent to the address where ur lawyer submit for the change of ownership.
5) If you have already moved to other address, go to the local authority / land office to update your address.
6) As for strata properties, if the scheme is already issued with strata title, the quit rent will be sent to the address of management corporation (MC). The MC will pay first then get the reimbursement from the owner through the management bill (maintenance fee + quit rent + insurance + water (if the water meter yet to be separated) + etc). If the scheme is still under developer/Joint Managment Body (JMB), the quit rent will send to the address of the developer/managment office.
7) As for assessment, the local authority usually send directly to the unit owner.
8) Last but not least, pls make sure u pay your quit rent orelse the land office have to right to auction your property to settle for the outstanding. As for the outstanding of assessment, the worst scenario is only seal your property and it can be solved (unsealed) by making partial or full payment.

ChampDog said...

Wow, thanks for such a complete guidelines and recommendations. Appreciate that. :)

Anonymous said...

Hi, your blog post is very informative. I own a landed property and I have a question abt master titles and individual titles in relation to quit rent. When I bought the property frm the developer, it was under a master title. It has now been converted to individual title. When it was under master title, was the developer responsible for paying the quit rent? I too have never received a single quit rent bill.

ChampDog said...

Before they hand-over to you, the developer should pay but after that, you should pay although it is under master title.

What happened to me in the past was the developer send me the "cukai tanah" bill. It actually took sometime for them to send me the bill.

Either you can go ask them, or wait a little bit longer. :) I don't know if you don't pay, whether the previous bill balance will bring over to the latest bill which is under your name. If no, then maybe you "untung" already! :)

Anonymous said...

If a land/property belongs to two holders, should the quit rent be paid by the two holders? Land office seems to send bills to each holder individually...

ChampDog said...

That's weird, it should be just the "first" holder.

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