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3 Types of Homeownership Costs in Malaysia: Quit Rent, Parcel Rent, and Assessment Rates

Owning property in Malaysia comes with recurring costs that are essential for maintaining legal ownership and contributing to local governance. The three primary charges you’ll encounter are Quit RentParcel Rent, and Assessment Rates. Below is a detailed explanation of each:


 

1. Quit Rent (Cukai Tanah)


What Is Quit Rent?

  • Quit Rent is a land tax imposed by the state government on owners of landed and strata properties.

  • It’s a yearly charge managed by the Land Office of each state.


Who Pays Quit Rent?

  • Landed Property Owners: Pay directly to the Land Office.

  • Strata Property Owners: Previously paid through the Joint Management Body (JMB), but recent changes allow direct billing to individual owners.


How Is Quit Rent Calculated?

  • Rate: Charged per square foot (psf) of the land area.

  • Formula:

    Quit Rent = Land Area (sq ft) × Rate (RM/psf)


Example Calculation:

  • Land Area: 2,500 sq.ft.

  • Rate: RM0.035 psf

    2,500 sq.ft. × RM0.035 psf = RM87.50

  • Typical Range: Most properties are charged under RM100 annually.


Payment Deadline:

  • Varies by state, with most states requiring payment by 31 May.

 

2. Parcel Rent (Cukai Petak)


What Is Parcel Rent?

  • Introduced to replace the inclusion of quit rent in strata maintenance fees.

  • A land tax specific to strata property owners, billed directly to individual owners.


Who Pays Parcel Rent?

  • Strata Property Owners, including condominiums, apartments, and other stratified buildings.


How Is Parcel Rent Calculated?

  • Calculated based on the share unit or size of the individual parcel.

  • Rates are set by the state government, so you’ll need to check with your local authority.

 

3. Assessment Rates (Cukai Pintu)


What Are Assessment Rates?

  • local council tax used to fund municipal services such as waste collection, road maintenance, and public infrastructure.


Who Pays Assessment Rates?

  • All property owners, including landed and strata property, must pay assessment rates.


How Are Assessment Rates Calculated?

  • Calculated based on the annual rental value (ARV) of the property, assessed by the local council.

  • Formula: 

    \text{Assessment Rate} = \text{Annual Rental Value (ARV)} \times \text{Rate (%)}


Example Calculation:

  • ARV: RM24,000/year (estimated based on market rental rates)

  • Rate: 4% (varies by council and property type)

    RM24,000 × 4% = RM960 per year


Payment Deadline:

  • Usually biannual, with deadlines set by the local council.

 

Summary of Differences

Cost Type

Who Collects It?

Who Pays?

Calculation Basis

Purpose

Quit Rent

State Land Office

Landed and strata owners

Land size (sq ft)

Ownership and land rights

Parcel Rent

State Land Office

Strata property owners

Share unit/parcel size

Ownership of strata parcels

Assessment Rates

Local Council

All property owners

Annual rental value (ARV)

Municipal services

Understanding these costs is crucial for property owners to stay compliant with local laws and plan their finances effectively.

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