MBPP mayor Yew Tung Seang said the rates for 16 of the 17 categories of properties had actually gone down. However, because the annual value of the properties has increased, many owners will end up paying more.
The MBPP and the Seberang Perai City Council (MBSP) have come under intense fire from ratepayers who have received notices that their assessment rates would go up from next year.
The Penang government had earlier announced that the annual value of properties and assessment rates in areas under the jurisdiction of MBPP and MBSP had been adjusted for 2020. A total of 322,549 properties on the island and another 327,401 in Seberang Perai will be affected.
At a press conference today, Yew said even his double-storey terrace house was not spared and that he would have to pay about RM600 compared with RM300 now.
He said the council had adjusted the rates not because it was short of money “but merely because we are following the law which requires us to adjust our rates every five years”.
Yew said the new assessment rates for 2020, in reality, were lower than those at present.
Based on handouts given at a council press conference today, the proposed assessment rates for 16 out of 17 property categories are lower than the current rates, which have been unchanged since January 2005.
The one category which sees no change in rates is that which covers association and clan buildings, which remain at 7%.
The landed property rates for next year are at a proposed 6% compared with the current 9.3%.
As for apartments and condominiums, the proposed rates are at 5.8% compared with the current 8.5%. For low-cost and low-medium cost apartments, the assessment rate next year will be 5%, compared with the current 7.5%.
However, the lower rates do not necessarily mean lower payments, because the assessment amount is arrived at after taking into account the annual value (AV) of the property.
The AV is calculated based on the monthly rental rate multiplied by 12. The monthly rental rates are determined by the Inland Revenue Board, Property Services and Valuation Department and other agencies.
Yew gave a hypothetical example of a terrace house which has an AV of RM3,900, which is based on a rent value of RM325 a month back in 2005.
He said after the new rates are introduced, the AV of the same property would be RM9,070, or RM756 a month in rental value.
Yew said based on the current rates, the property owner would have to pay RM362.70 in assessment, based on a 9.3% rate. However, next year, the owner would have to pay RM544.20, based on a 6% rate, he said.
He said most property owners would have to pay higher assessment than usual, as the rental rates would have likely soared over the past 15 years.
On Sept 13, Penang executive councillor Jagdeep Singh Deo said with the higher assessment collection, MBPP would earn an additional revenue of RM54.3 million while MBSP would earn RM39.7 million next year.
He had said the extra money would not be enough to cover all expenditures of both the councils.
Jagdeep had also said the new assessment rates were still the lowest compared with rates in Kuala Lumpur, Petaling Jaya, Shah Alam, Subang Jaya and Kota Kinabalu.