LAND management remains a critical source of income for the Penang government, contributing approximately 40% to 50% of annual state revenue through land tax collections, premium payments, and transaction fees.
To strengthen this vital revenue stream, the state government is committed to modernising and digitising land management systems. This initiative aligns with its broader development agenda, focusing on economic empowerment, environmental sustainability, and social progress.
During the last Penang Legislative Assembly session, Penang Yang di-Pertua Negeri Tun Ahmad Fuzi Abdul Razak had called for innovative strategies to enhance state revenue.
Chief Minister Chow Kon Yeow said, responding to this call, the state government has submitted a proposal to the National Land Council to review land tax rates, effective from Jan 1, 2026.
“The review will also include reclassifying certain rural lands into urban lands across Penang.
“The last revision of land taxes in the state dates back to 1994.
“Currently, a task force comprising officers from the Land and Mines Office and District Land Offices is conducting a thorough review of 370,000 land titles.
“The process, expected to conclude by the end of 2025, aims to incorporate diverse stakeholder input to ensure fairness and balance,” he explained when tabling the Penang 2025 Budget at the Penang Legislative Assembly today.
He said that the tax revision and land reclassification are projected to boost state land tax revenue by RM50 million to RM100 million annually starting in 2026.
“Recognising the importance of fair and supportive measures, the state has also enhanced its policies on lease renewal and ownership grants.
“Introduced in 2023, these improvements include discounts of up to 90%, depending on ownership type, remaining lease duration, and renewal period.
“Since implementation, these measures have benefitted 31 landowners in 2023 and 91 in 2024, with total premium reductions amounting to RM170 million,” he mentioned.
Chow added that to further streamline processes, landowners could now simultaneously apply for land-use category changes or rezoning alongside lease renewal applications.
However, such concurrent applications will only proceed once rezoning conditions are met.
Story by Christopher Tan
Pix by Darwina Mohd Daud, Muhamad Amir Irsyad Omar and Adleena Rahayu Ahmad Radzi