Thursday, December 26, 2013

Bugger this City Hall! - City Hall’s revenue forecast shows rate hike a foregone conclusion, says house-buyers’ group

DECEMBER 27, 2013

Kuala Lumpur City Hall’s (DBKL) expected assessment collection of about RM1.2 billion next year showed the authorities had already decided on property valuation before consulting residents, says the House Buyers Association (HBA).
DBKL has now cut its forecast by RM70 million to RM1.13 billion after Federal Territories Minister Datuk Seri Tengku Adnan Mansor's decision to cut the assessment rate from 6% to 4% of the new property valuation.
“It’s a premeditated conclusion by City Hall even prior to the public consultation in January,” HBA secretary general Chang Kim Loong told The Malaysian Insider in Kuala Lumpur.
“It serves no purpose to have dialogues with local councils when they have made up their mind. The objection letters are just a whitewash,” he added.
KL mayor Datuk Ahmad Phesal Talib had said on Tuesday that City Hall had initially anticipated getting RM1.2 billion from property assessment but would now take in RM70 million less.
“Assessment tax is the main contributor to City Hall’s overall income at 56%,” Ahmad Phesal had said.
DBKL's certainty over its expected income from assessment tax collection has drawn doubts over the purpose of town hall hearings to address ratepayers’ objections.
“The filing of objection letters just looks like it was done for the sake of filing to comply with the local government act,” Chang noted.
“We have been hoodwinked,” he added
Following public protests over  DBKL's notice to property owners informing them of a hike in property valuation, Tengku Adnan had said last month that the proposed increase would be deferred until the public hearings are held from January to March 2014.
DBKL had increased its valuation of properties after maintaining property value for 21 years. Ratepayers had been expected to pay 6% tax on the newly revised valuation figures.
Complaints soon emerged that the increase in property valuation had soared to as high as 300%. In a span of one month, DBKL received over 153,000 objection letters from some 500,000 property owners.
Last week, Tengku Adnan had announced that the assessment rate had been reduced and assured ratepayers that they could still pay the old sum until revisions are reflected in the July 2014 assessment tax bill.
Chang said that DBKL’s decision to conduct town hall hearings shows the administration’s disregard towards each property owner’s complaint.
“This means in one shot, they will listen to a few thousand peoples’ complaints and with a stroke of a pen, reject all the objections simultaneously,” he said.
“Every complaint must be heard individually by the panel. In a town hall meeting, only a few will get to speak up,” he added.
Calling for a fairer system that allows individual property owners to privately voice their concerns, Chang said that owners also have the right to inspect the valuation on neighbouring lots to ensure fairness in valuation.
Moreover, if DBKL maintained its new valuation figures, it is more reasonable to lower the tax rate instead, he added.
“HBA’s stand is that a reasonable tax on residential properties should be 2% based on the revalued figure,” he said.
“For those whose properties are ridiculously revalued, they should be dealt with individually and City Hall should conduct fresh valuations,” he added.
Last year, DBKL collected RM810.53 million from assessment tax. It estimated this year’s amount to be RM880.8 million.
Based on the estimate provided by DBKL for 2014, the administration would be collecting an additional RM200 million in income per annum. – December 27, 2013.

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