Tuesday, November 29, 2022

Penang gives 90pc discount for extension of lease for residential land

Penang gives 90pc discount for extension of lease for residential land

GEORGE TOWN, Nov 21 — All categories of leasehold land in Penang will be given a discount of between 50 per cent and 90 per cent for the extension of the lease held by the state, Penang Chief Minister Chow Kon Yeow said today when tabling the state Budget for 2023.

He said those who wish to extend the leases of their land will need to pay a premium for the extension based on the land valuation.

“The state government has agreed to give a discount on the premium from as low as 50 per cent to 90 per cent based on the land value without taking into account the value of the structure on the land,” he said at the state legislative assembly today.

The discount on the premium is for those whose leases are expiring or have expired and it included all land, namely residential, agriculture, commercial and industrial.

“Agricultural and residential individual landowners will get up to 90 per cent discount on the premium while commercial land will get up to 80 per cent discount,” he said.

He said industrial land will get a discount of between 50 and 75 per cent, according to the criteria set by the state.

However, the discount is subject to the condition that the landowners cannot sell the land for the next 10 years.

“There will be a moratorium on the transfer of the land ownership for 10 years and if the landowner was to sell the land within this period, they will have to pay 100 per cent of the premium,” he said.

He said this is to prevent land speculation so that landowners do not take advantage of this leasehold extension premium discount.

Later, in a press conference, Chow said the state has between 20,000 and 30,000 leasehold lands of various categories.

“Over the past two years, several thousand leasehold lands in Penang, with leases of 60- to 99-year terms, are coming to an end. Some have ended and those with expired leasehold land are concerned whether the state will extend the lease,” he told reporters outside the house.

He said the state had been holding stakeholders’ engagement sessions and decided to extend all leases.

“These leases will be extended and if they apply for an extension, it comes with a premium and the state will give a discount on this,” he said.

He explained that the premium charged will be based on the land value so if the land is worth RM1 million, the premium to extend it for another 99 years will be RM1 million.

“So, in this case, with a 90 per cent discount, they have to pay RM100,000 to extend the lease for another 99 years,” he said.

He said this is based on the value of the land and does not include any properties on the land.

“This is the same for industrial land. Most are leasehold for 60 years and many of these have 10 to 20 years left,” he said.

He said the industries can extend the lease for another 60 years or 30 years, or even 99 years.

“With this decision, they can reaffirm their commitment to the industry here, they can keep the land and their facilities and based on the land valuation, they can pay a premium with a discount of at least 50 per cent to extend the lease,” he said.

(Source of news : Yahoo News)