Q.
a) Land alienation premium is determined by the State Authority upon approval of land alienation to either individual or body. The calculation of premium depends on five (5) main factors. Using appropriate examples, explain the above factors. (10 marks)
b) Additional premium will be imposed if the State Authority approved a number of categories of application. Clarify the meaning of additional premium and explain the situations where additional premium is imposed. (15 marks)
(15 marks, 2013 Q5)
A.
Premium payable for lease extension in West Malaysia.
a)
Alienation is defined in Section 76 of the National Land Code 1965 as "..... disposal of State Land by the State Authority for a term not exceeding ninety-nine years or in perpetuity .....".
A premium is charged on the alienation of the land. The amount of premium is determined based on a certain percentage of the market value of the land in accordance to the respective State Land Rules.
JPPH's role is to determine the market value of the land to be alienated.
JPPH (Jabatan Penilaian dan Perkhidmatan Harta), with power vested in the National Land Code, and respective State Land Rules, carries out valuation of the land/property, thereafter arrives at a premium. The calculation of the premium depends on 5 factors, they are:
(From JPPH brochure on land alienation)
- The use of the land applied for alienation; e.g. for agricultural use
- Condition of the land; e.g. non-transferable, for agricultural use only
- The term of lease; e.g. 60 or 99 years leasehold
- Location; and (price varies with market forces and location of land)
- Shape and Size of the land, e.g. shape of triangle may be less usable than rectangle, with streams in the centre, or mountain as hindrance to development)
Usually the State Authority will issue a leasehold title of 60 or 99 years, with or without an expressed restrictions. Upon payment of the premium the title is issued to the leaseholder.
Ref:
Land Alienation Brochure by LPPH, available at
http://www.jpph.gov.my/V2/pdf/Land_Alienation.pdf
b)
Additional premium
(Thanks to AngieNg for the below answer)
Further premiums also known as conversion fees
Imposed on:
S124(1) of NLC
(a) The alteration of category of land use
(b) The recession of any express condition or restriction in interest or the removal of any expression from the document of title
(ba) The removal from of expression "rubber", "kampong" and imposition of other express conditions
(c) The amendment of any express condition or restriction in interest endorsed on or the imposition of any new express condition.
Please refer to Premium on land conversion for answer to this part.
Ref:
S.124 of National Land Code.
Earlier posts.
Please refer to Premium on land conversion for answer to this part.