Penang is conducting a long-overdue review of land tax rates for more than 370,000 properties across the state, with new rates expected to take effect from Jan 1, 2026.
Chief Minister Chow Kon Yeow revealed that the review, led by the state's land and mines office and district land offices, aims to update outdated rates, especially for first-grade land, which constitutes over 52% of all registered land titles in Penang.
"There are 197,412 first-grade land titles. These will be affected by the review as the current rates no longer reflect market value and have led to revenue losses," Chow said in a written response at the state assembly.
First-grade land refers to premium land categories with high ownership rights and minimal usage restrictions. The state government believes that the stagnant tax structure has failed to keep pace with the sharp appreciation in land values over the past three decades.
While several revised rate structures have been proposed, no final decision has been made. The review process is expected to continue through the end of 2025.
Penang land and mines office director Faizal Kamarudin previously noted that the last land tax revision took place in 1994. He emphasised the urgent need to adjust the rates to reflect current market realities and to boost the state's revenue base.
The proposed overhaul marks a significant move to modernise Penang's land administration framework and could have broad implications for property owners across the state.
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