The Penang government has officially gazetted revised quit rent tax rates for the entire state, marking the first adjustment in more than three decades. The new rates, published in the Penang Government Gazette No. 37 on September 11, will come into effect on January 1, 2026.

Chief Minister Chow Kon Yeow said the revision, approved by the National Land Council in 2024, will apply to nearly 370,000 land titles across Penang. The rates will remain unchanged for at least 10 years, with the next review scheduled only after the current term.

“The last review was conducted in 1994. The state skipped two cycles in 2004 and 2014, which delayed adjustments for 30 years. This long gap has limited revenue growth and made it harder to address arrears and leakages in collection,” Chow explained at a press conference in Komtar.

The revision will not affect the state’s 300,000 strata parcel accounts, where owners will continue paying their existing parcel-based rates. Instead, the adjustment is aimed primarily at industrial and commercial land, which has seen significant returns for landowners over the years.

“For residential and agricultural land, the increase will be modest. For example, the minimum rate for residential land in urban areas will only rise from RM40 to RM50,” Chow noted.

Rebate and Incentive Measures

To cushion the financial impact, the state will introduce a rebate scheme beginning in 2026. Landowners will receive a 32.5% rebate in 2026, followed by 20% rebates in both 2027 and 2028. Chow clarified that landowners must continue paying their 2025 rate if the post-rebate amount falls below the existing charge.

The rebate programme is expected to reduce state revenue by RM80 million to RM100 million annually during the three-year period.

In addition, several incentives will be rolled out in 2026:

• Penalty waiver: Full exemption of penalty charges on quit rent and strata parcel arrears for payments made between January 1 and December 31, 2026, valued at about RM25 million.
• Conversion discount: A 50% reduction in land conversion premiums for agricultural lots converted to residential use, applicable to individual housing and subject to planning guidelines. This aims to support landowners in areas where farming has ceased.
• Digital payment rewards: Attractive prizes and lucky draws for those who pay quit rent and strata parcel taxes through the PG Land mobile application, to encourage online transactions.

Chow said these measures are designed to balance the need for revenue with financial relief for landowners.

“With the revised rates, Penang expects a stronger revenue base, which will enable us to provide more targeted financial support and long-term cost-of-living assistance for the people,” he said.

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