Premiums on renewal of leases

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Hi readers :)

Do you know that for a property with a lease period of 99 years or shorter, you do not really "own" that property as you are merely renting it from the government for a specified period.

Have you checked the unexpired lease period of your property?
Do you know that a property with a shorter unexpired lease period normally fetches a lower value as banks do not normally offer financing.

If it is expiring soon, have you calculated the premium payable to the Land Office? Do you know how to calculate the premium payable?
for Sabah I guess it is something like ...

0.5%  x  the Market Value of the property(ie. land)  x  the number of years you want to renew the lease

(if you happen to know the correct formula, do share, thanks)
eg. say the market value of the land is RM500K, and you want to renew the lease for another 60 years...so the premium payable is 0.5 % x RM500K x 60 years = RM150K. Quite expensive huh!

Please remember do not spend too much on a building that sits on a land with an expiring lease period (unless you are filthy rich and don't bother). Why? the property will be transferred to the Land office / government upon the lease period expires... so think about it

Do you know that Sarawak government fixes the premiums on renewal of leases effective 15 May 2010. So what is new over there ?


For residential properties. the new rates are RM1,000 for a terrace house, RM3,000 (semi-detached) and RM6,000 (detached).

For shophouses, the rates are RM40,000 per unit in Kuching, Sibu, Miri and Bintulu; RM20,000 for Sarikei, Sri Aman, Kapit, Limbang, Mukah, Betong and Samarahan, and for rural towns of Lundu, Asajaya, Niah, Marudi and the likes, RM10,000 per unit.

Note that the new policy will cover renewals for 60 years.

Read all about it here
Sarawak govt fixes premiums on renewal of leases
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SIBU: The state government has announced a new land lease renewal policy that imposes premiums based on flat rates.

To take immediate effect, it has done away with the old system of calculating premium based on a percentage of the market value of the property.

The new policy will cover renewals for 60 years.

Chief Minister Tan Sri Abdul Taib Mahmud made the surprise announcement during a rally here last night.

He said the policy would cover residential, commercial and agricultural properties.

For residential properties. the new rates are RM1,000 for a terrace house, RM3,000 (semi-detached) and RM6,000 (detached).

For shophouses, the rates are RM40,000 per unit in Kuching, Sibu, Miri and Bintulu; RM20,000 for Sarikei, Sri Aman, Kapit, Limbang, Mukah, Betong and Samarahan, and for rural towns of Lundu, Asajaya, Niah, Marudi and the likes, RM10,000 per unit.

The rates for agriculture land, RM5,000 per acre for town land, RM2,500 per acre for suburban land, and RM200 per acre for country land.

Taib said the state was implement ing the new system to make it easier for the people to understand.

“I have always said the state government is sensitive and responsive to the people. The rates are the lowest compared with other states,” he said.

At a meet-the-people session at the 54-door Rumah Dick in Jalan Oya earlier yesterday, Taib said he was unfazed by the Opposition's attacks against him.

“Let them attack me. The rakyat knows me better,” he said, adding that if he was as bad as the Opposition made him out to be, then the state would have gone down the drain a long time ago and not experience vast development.

Meanwhile, Deputy Prime Minister Tan Sri Muhyiddin Yassin presented government grants amounting to RM1.12mil to six Islamic development projects here yesterday.

Source : The Star