1 –15, 2026 BULETIN MUTIARA Story by K.H. Ong Pix by Law Suun Ting L ANDOWNERS in Penang will benefit from the state government’s newly announced revision to the 2026 Land Tax mechanism.
“Under the revision, First Grade land without planning approval, as well as land with Nil category and unspecified land use conditions (NIL), will be reclassified as 'Building Use' for tax purposes,” Chief Minister Chow Kon Yeow said at a press conference in Komtar recently.
He added that the move is aimed at reducing the financial burden on landowners, particularly those with commercial and industrial land that did not obtain proper planning approval.
Under the new mechanism, he said urban land will be taxed at RM0.70 per sq metre, and rural land at RM0.50 per sq metre, compared with the previously proposed RM3.25 per sq metre for commercial or industry.
“However, landowners in this category will no longer be eligible for the existing 50 per cent rebate, as they are already enjoying a significant reduction in land tax rates,” he said.
Also present were Penang Land and Mines director Datuk Dr Faizal Kamarudin and Northeast district officer Isma Suhaimi Shariff.
Chow said the adjustment was a refinement of the 2026 land tax review, designed to help landowners while ensuring a fair and people-centric approach.
He also urged landowners to proactively develop their land through proper legal channels to support Penang’s growth and development.
“As of 31 March 2026, the state’s District Land Offices received 4,001 appeals and feedback submissions,” Chow said.
“Of these, 2,885 involved significant increases in land taxes, including First Grade land deeds, rural-to-urban reclassifications, durian agricultural land, hillside properties, and rate adjustments. The remaining 1,116 cases involved technical issues like buildings spanning multiple lots, financial difficulties, abandoned projects, non-profit organisations, and idle land.”
Currently, 3,043 cases are being actively processed by District Land Offices and the Penang Land and Mines Office.
At the press conference, Chow also announced several tax relief measures and incentives (see accompanying infographic).
Chow noted that these measures have been widely accepted by stakeholders and stressed the importance of following proper planning procedures for future land development.
As of March 31, 2026, over 163,000 landowners, representing more than 54% of active taxpayers in 2025, had completed their land tax payments.
Chow urged landowners to submit any remaining appeals to the District Land Offices before the April 30 deadline, although late submissions will still be considered on a case-bycase basis.
The revised mechanism, he said, reflects careful deliberation by the State Executive Council (Exco), taking into account feedback from landowners, comparisons with other states, and the need to mitigate the impact of tax rate increases while promoting development in Penang.
On April 3, Chow visited the Northeast District payment counter at Komtar to see its operations.
During his visit, he reiterated that all schools across the state need to pay a nominal RM50 rate per lot, and advised respective schools to check their tax bills via the PgLand portal and make payment either online or at counters statewide.
The following day, Chow handed over the revised land tax bills to SRJK(C) Sin Ya and SMJK(C) Jit Sin in Seberang Perai in a symbolic handover during his visit.
Chow said the visit was aimed at delivering the revised bills following the state government’s earlier decision to grant a nominal land tax rate to 398 schools statewide, covering about 522 land lots in total
. He reiterated that the RM50 rate applies regardless of land ownership, including cases where school land is held by companies or trustees, ensuring all schools benefit from the latest land tax review.
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