Valuation for conversion of land use, or more technically, change of category of land use or express condition of title, is normally carried out by the Valuation and Property Services Department of Malaysia (JPPH Malaysia).
CHANGE IN CATEGORY OF LAND USE
Pursuant to Section 52 of the National Land Code 1965, all alienated lands are divided into three (3) categories of land use i.e. “Agriculture”, “Building” and “Industry”. All land owners must use the land in accordance to the category of land use and the express condition stipulated in the title. Failure to do so is a breach of condition of the land alienated and the State Authority can forfeit the land. As such any land owner who intends to use his land for another category of use other than the category stated in the title, must apply to change the category of land use accordingly. Sections 124 and 124A of the National Land Code and the respective State Land Rules allow landowners to apply for such changes. The State Authority will charge an additional premium on all applications approved for change of use.
JPPH’s MALAYSIA ROLE
JPPH Malaysia will carry out the valuation upon request and advise the Land Administrator accordingly.
VALUATION BY JPPH MALAYSIA
A valuation of the land is required because the law requires an additional premium to be paid when an application for a change in category of land use/ express condition is approved. The calculation of the additional premium is based on the State Land Rules. The basis and rates of premium differ between the respective states in Malaysia. In almost all instances, a market value has to be determined.
THE BASIS OF VALUATION
Theoretically, the additional premium charged is a percentage of the difference in value between the new and the existing use. Where valuation is required, the valuation would be the market value for the new use and the market value for the existing use. The percentage rate and the basis for the computation of additional premiums are provided for in the respective State Land Rules. Among the factors that are taken into consideration in the valuation are condition of the land as at the date of valuation, the type of development that can be approved, location, shape and size of the subject land.
If the application is submitted with correct and complete information and plans, JPPH Malaysia will report the valuation to the Land Office/Land and Mines Office within 10 working days upon receipt of the application by the office.
APPLICATION FOR CONVERSION
The landowner must submit his application to the Land Office/ Land and Mines Office and must comply with all the requirements.
INFORMATION REQUIRED FROM A LAND OWNER
- Copy of the title;
- Address of the property (if any);
- Site plan;
- Location plan;
- Development proposal;
- Feasibility study (if any); and
- Valuation report (if any).