cukai taksiran, cukai pintu, kadaran cukai pintu ..
LEARNING OUTCOME
Student are able to :
a. identify relevant provision in the Local Government Act 1976
b. identify the authority governs rating [assessment] exercise
c. explain the basis of assessment and assessment rates
d. explain an appeal, relief and exemption (if any) available to rating.
e. explain the valuation list and its uses in local authority assessment tax
Nature and Incidences
• a local government tax imposed under Part XV [Rating & Valuation], Local Government Act 1976 (Act 171)
• imposed all rateable holdings [real property] within local authority/municipal council jurisdiction for the service rendered
• paid by the owner or occupier of rateable holdings to the respective local authority.
• payable half yearly in advance to the respective local authority in the month January (January – June) and July (July – December).
• Contribution in Aid of Rate [CAR] are paid by federal government, state government or their agencies on rateable holdings own by them situated in the jurisdiction of a respective local authority in lieu of the rates leviable on such properties.
PURPOSE OF LEVYING RATING [ASSESSMENT RATES]
The main purpose of levying rating [assessment rates] is to provide the local authority with the revenue it requires for providing public services such as street lighting, waste disposal, road repairs and etc.
RATING PRINCIPLES
General principle to be observed in the preparation of valuation for rating purposes :
i. Rebus Sic Stantibus – from latin words mean ‘as things stand’. The rateable holdings must be valued on the assumption that at the relevant date:
- a.physical state and actual use of the rate-able holding
- b.any relevant factors affecting the mode or character of occupation,
- c. the occupation and use of other premises in the locality, the transport services and other facilities and amenities in the locality were the same as they were at the time the assessment is made.
iii. Tone of List - is to be taken as the general level of the valuation prevailing in the assessment lists of each authority in any given year. Once this general level has been established, it will be adopted for rating purposes. This is done in the interest of uniformity. Example : corner house & intermediate house
RATING AUTHORITY
- assessments for rating purposes has been the responsibility of the local Authority as provided in PART XV , Local Government Act 1976 (ACT 171)
- Sec 127 - The local authority may, with the approval of the State Authority, from time to time as is deemed necessary, imposed either separately or as a consolidated rate, the annual rate or rates within a local authority area for the purposes of this Act or for other purposes which it is the duty of the local authority to perform under any other written law
LOCAL GOVERNMENT ACT 1976 [ACT 171]
Sec 2 – Interpretation
- “local authority” means any City Council, Municipal Council or District Council as the case may be, an in relation to the Federal Territory means the Commissioner of the City of Kuala Lumpur appointed under section 3 of the Federal Capital Act, 1960.
- “improvements” in relation to a holding means all work done or material used at any time on or for the benefit of the holding by the expenditure of capital or labour by the owner or occupier thereof in so far as the effect of the work done or material used to increase the value of the holding.
- “holdings” means any land with or without buildings thereon, which is held under a separate document of title and in the case of subdivided buildings, the common property and any parcel thereof and, in the case of Penang and Malacca “holdings“ includes messuages, buildings easements and hereditaments of any tenure, whether open or enclosed, whether built on or not, whether public or private and whether maintained or under statutory authority
- “rateable holding” means a holding which is subject to the payment of a rate made and levied under this Act.
- “land” includes things attached to the earth or permanently fastened to anything attached to the earth;
- “building” includes any house, hut, shed or roofed enclosure, whether used for human habitation or otherwise, and also any wall, fence, platform, underground tank, staging, gate, post, pillars, paling, frame, hoarding, slip, dock, wharf, pier, jetty, landing stage, swimming pool, bridge, railway lines, overhead or underground pipelines, or any other structure, support or foundation.
- “annual value” means the estimate gross annual rent at which the holding might reasonably be expected to let from year to year the landlord paying expenses of repair, insurance, maintenance or upkeep and all public rates and taxes;
- “improved value” of holding means the price that an owner willing, and not obliged to sell might reasonably expect to obtain from a willing purchaser with whom he was bargaining, for sale and purchase of a holding
Sec 130 – Basis of assessment
- Assessment rate imposed may be assess upon annual value of the holdings for most state in Malaysia or upon improved value of the holdings for the state of Johor
- In estimating annual value no account shall be taken of any restrictions or control on rent (applicable to prewar building)
- The annual value of the land which is vacant, partially occupied or partially built upon, shall be defined as on either an annual value or 10% of market value as the annual value.
- The annual value of the following land shall be taken at 10% of market value as the annual value.
ii. which is vacant, unoccupied or not built upon;
iii. with an incomplete building; or iv. with a building which has been certified by the local authority to be abandoned or dilapidated or unfit for human habitation
- If there is a building in the case of (ii) & (iii), then the building should be ignored.
- If it were vacant land with no buildings there on, the local authority with approval by State Authority, may reduce the percentages to a minimum of 5% of the market value.
- The definition of improved value is similar to capital/market value of the holding.
ASSESSMENT RATES CALCULATION
Annual Value Basis Assessment = Annual Value X Assessment Value Rate
annual value can be revised every 5 years
Improved Value Basis
Assessment Value = Improved Value X Assessment Rate
RATES FOR ASSESSMENT
Rates are varies from one local authority/municipal council to the other.
Rates below are applicable to holdings situated in Majlis Bandaraya Shah Alam [MBSA] jurisdiction.
Below are rates applicable to holdings located within Majlis Bandaraya Johor Bahru [MBJB] jurisdiction.
residential
commercial
industrial
agricultural
malay reserve
PROPERTY EXEMPTED FROM ASSESSMENT RATES
Sec 134 – Exemption from rates
The State Authority may at its discretion exempt such holding or such part thereof from the payment of any rate when any building or part thereof used exclusively –
a. as public places for religious worship
b. as licensed public burial grounds or crematoria
c. for public schools;
d. as public places for charitable purposes or for the purposes of science, literature or the fine arts, and not for pecuniary profit.
REMISSION AND REFUND OF RATES
Sec 163 – Remission or refund of rates
- is applicable where a building is not occupied and no rent is payable. In such a case, the Local Authority/Municipal Council may order that a portion of the rates be refunded or remitted.
- Conditions For The Application Of Remission / Refund of Rates
b. Notice in writing has been given to the Valuation Department of the Local Authority within 7 days of the commencement of the vacancy. Applications for remission / refund of rates must be sent not later than 1 month from the date of expiry of the relevant half year, i.e. before 31 January / 31 July.
d. Show proof that the building is in good repair and fit for occupation.
e. Reasonable efforts have been made to obtain a tenant, for example, by using the services of a real estate agent or advertising in the newspapers or displaying a 'For Rental' sign at the building.
OBJECTION & APPEAL AGAINST ASSESSMENT RATES
Owners have the right to object to the Local Authority on the rateable value placed on their holdings. Owners also have a right of appeal to the High Court.
Sec 147 – Objection and Appeal ( Important )
• any person aggrieved with the assessment imposed may make objection in writing within a period of one month from the date of the Assessment Notice. Objections may be made on the following grounds:
a. that any holding ( property ), which is rateable, is valued beyond its rateable value;
b. that any holding valued is not rateable;
c. That any person who, or any holding which ought to be included in the Valuation List is omitted there from;
d. That any holding is valued below its rateable value, or
e. That any holding or holdings which have been jointly or separately valued ought to be valued otherwise.
VALUATION LIST
• Prepared under Section 137, LGA 1976 and also known as Tone of List for all holdings not exempted from payment of rates.
• Contents : the serial number, land title number, location of the rateable property, house number, owner, occupier, type of property and rateable value.
• prepared and completed once every five years or within such extended period as the State Authority may determine.
• It remains in force until superseded by a new Valuation List.
• It shall be
i. published in two local newspapers at least one of which is in the national language.
ii. deposited in the office of the local authority, and
iii. opened for inspection by all owners and occupiers of holdings comprised therein during office hours.
• assessment rates shall be payable in respect of the rateable holdings in accordance to valuation list
Sec 143, LGA 1976 - the local authority shall confirm valuation lists on or before the thirty-first day of December of the year preceding the year in which any Valuation List is to come into force, with the approval of the State Authority.
It shall be deemed to be the Valuation List until such time as it is superseded by another Valuation List.
PURPOSE OF VALUATION LIST
to standardize the basis of value in determining the annual value or improved value on each rateable holdings.
PREPARATION OF VALUATION LIST
Flowchart diagram on the preparation of valuation list
Gazettes
↓
conduct site inspection on rateable holding
↓
valuation
↓
determine the annual value or improve value
↓ ↑ *
objective and appeal
↓
approved and confirmation on valuation list
Thank You
