Happy New Year 2011 !

Good news for properties owners whose land leases may be expiring soon!

The Sabah State government has reduced the premium on lease renewal. The additional premiums for extension of land leases on houses has been lowered by 80 per cent and that for commercial and industrial properties by 45 per cent.

According to the report in the Daily Express (published on 30 December 2010), the Land office has used the new premium rate beginning this year (2010). But the formula use to calculate the premium was not made public. (Anyone who has any knowledge on this may share his / her view in the comment section)

You may want to read my earlier posts on this subject

1. Premiums on renewal of leases 2

2. Premiums on renewal of leases 1

Here is the full report as published in the Daily Express on 30 December 2010...

45-80pc discount on renewals

Kota Kinabalu: Good news for owners of both residential and commercial-cum-industrial properties in the State whose land leases may be expiring soon.

The additional premiums for extension of land leases on houses has been lowered by 80 per cent.

And that for commercial and industrial properties by 45 per cent.

Chief Minister Datuk Seri Musa Aman said the Land and Survey Department here used the new premium rate beginning this year.

"Such low premium rate for renewing extension of land leases for homes proves the State Government is dedicated and committed to realsising the people's needs to own their houses for a longer period.

We want also to make sure the new premium rate will not burden the houseowners but accommodate them to posses their homes when their land leases are almost expiring," he said.

Read the full text here Show/Hide

Musa, who is also Minister of Finance, said this in his speech at the launching of Wisma Tanah dan Ukur by Head of State Tun Ahmadshah Abdullah at its hall here, Wednesday.

Wisma Tanah and Ukur on 5.1-acre site is the first headquarters of the Land and Survey Department since its inception in 1882.

The previous building was deemed unsafe for the staff to carry out their duties.

Hence, the new headquarter for the department, Wisma Tanah and Ukur was constructed and became operational in 2007.

Also present were Federal Deputy Minister of Natural Resources and Environment Tan Sri Joseph Kurup, Minister in the Chief Minister's Department Datuk Nasir Tun Sakaran Dandai, State Secretary Datuk Sukarti Wakiman, Federal Secretary for Sabah,s Datuk Mohamad Hatta and Sabah Land and Survey director Datuk Osman Jamal.

On changing land use from agriculture to housing, commercial and industry, Musa said the additional premium rate for such purpose has been reduced since April 2008.

The move was aimed at ensuring the property market is maintained at a level where the majority of Sabahans can afford to own and purchase them.

Through the Government Transportation Programme (GTP) under a lab for Bumiputera Sabah and Sarawak, Musa said the Government is committed to ensure Native Customary Right Land is issued with individual titles or communal titles.

"Through Sabah Land Information System (SALIS), the State Government will set up an Idle Native Land Bank to record land acreage about 140,000ha.

"This will facilitate implementing agencies like Sabah Land Development Board (SLDB) and Sabah Rubber Industry Board (LIGS) to make plans of developing the lands on commercial scale through a joint venture with the land owners. By doing this, such development plans on the idle land could have positive impact to enhancement of the people's socio-economic and State's economic growth," he said.

Therefore, Musa said the effort of Land and Survey Department to establish a Unit for State Customary Land is very timely to ensure the success of GTP under the Bumiputera Lab for Sabah.

He also commended the success of building Wisma Tanah dan Ukur that reflected the State Government's high commitment in ensuring efficiency and effectiveness of public delivery system, increasing land revenue and providing conducive working environment to the Land and Survey Department staff to give best service to the clients.

Musa said he was impressed with management level of the department in upgrading its services to public and reducing bureaucracies to expedite official land matters.

Among the services are shortening the time of processing land surveying for issuance of land titles, creating a new method for Temporary of Lease application for sand and stone extraction from the river and land.

This also includes, he said, speeding up processing work for land dealings registration using a system of Land Dealings Electronic Submission System (LADESS).

Without stating the amount, Musa also expressed satisfaction with the department's collection of land revenue collection for November, which was the highest ever achieved by the department.

He also called on the department to intensify its law enforcement on offences involving encroachment into State lands, illegal extractions of stones and sand, digging on land without permit and pollution to environment so as to safeguard the State's natural resources form further destruction.

Source : Daily Express

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Source : Yahoo! Sports

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In case you did not read today's news in The Star Online...

Lease extensions to 99 years


State governments can approve applications for renewal or extension of leasehold land for a period of not more than 99 years unless they require the land for public purposes.

Deputy Prime Minister Tan Sri Muhyiddin Yassin said all state governments had agreed to adhere to the new policy.

“The implementation of this policy would fulfill the needs of the rakyat who are worried about losing their land titles,” he told reporters after chairing the 66th National Land Council meeting here yesterday.

He said the policy, which was decided during the meeting, would be used as a guide with several conditions which include:


1. leasehold land under the categories “building”, “industrial” or “agriculture” for which owners can apply at any time to extend their lease and are not bound by the remainder of the lease period;
2. applicants are required to make simultaneous applications in order to surrender their land in accordance with Section 197 of the National Land Code and apply for alienation using Form Schedule 1 of the respective State Land Rules and existing rules and procedures under the National Land Code 1965;
3. extension of the new lease is not more than 99 years if the land is not required by the government for public purposes;
4. it is subject to imposition of relevant fees;
5. the new period of the lease is effective from the date of the registration of the new title; and
6. it is not contrary to any written laws that are enforced.


Source : The Star online (By IZATUN SHARI ~ Published on Thursday December 2, 2010)

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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.In addition, if you were to renew the lease the premium may become unaffordable (for many)!

Please refer to my earlier post on the same subject : Premiums on renewal of leases

Image source : http://www.dailymail.co.uk/news/article-1330976/Cheerleaders-bikinis-blamed-putting-team-Asian-Games.html

As I was reading the news in the Daily Express (one of my favourite online news portals) I found an interesting article related to the issue of land lease renewal premium which I would like to share with...

here it goes...

Kolombong landowners worried premium may be excessive: SAPP

Kota Kinabalu: Sabah Progressive Party (SAPP) said landowners at the Kolombong area are worried that the State Government will charge excessive premium for extension of their title deeds.

Former SAPP Treasurer-General, Datuk Wong Yit Ming, pointed out that the BN Government had promised to extend their title deeds and that the premium would be so affordable that every landowner will be able to pay for it.

According to the landowners most of the title leases in Kolombong area will expire in the next 10 years.

At the moment, most of the banks or financial institutions refuse to give loans to the landowners unless they can extend their title lease to another 30 years.

Wong also said that when some of the landowners approached the Natural Resource Office in the Chief Minister's Department to renew their lease titles for another 60 years, they were told that the premium required for the extension of lease title is very much higher than the amount promised.

"Some of the landowners cannot even afford to pay for the premium requirement.

They all feel cheated and upset that the BN Government cannot fulfil their promises.

"SAPP calls on the State Government to speed up the renewal of Kolombong land titles seriously and the State Government to be fair in charging premium in order to help the landowners extend their title deeds," he said.

Source : Daily Express, Published on: Tuesday, November 23, 2010

Other related news you may want to read (all from the Daily Express online news):
1. Land lease extension issue for discussion with Dept
2. Rate set to renew lease too high: DAP
3. Sari denies higher premium for Kolombong land
4. Kolombong land lease extended to 99 years
5. Widow's 18-year futile wait to renew land lease

Have you read my earlier post on the same topic? Here is the link Premiums on renewal of leases

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Image source from http://undukngadau.com/blog/

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

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