Land management continues to serve as a cornerstone of Penang’s economic stability, contributing a significant 40% to 50% of the state’s annual revenue. This income is derived from land tax collections, premium payments, and transaction fees. To bolster this crucial revenue stream, the Penang government is embarking on a comprehensive digitisation and modernisation of its land management systems.

Chief Minister Chow Kon Yeow, addressing the Penang Legislative Assembly during the tabling of the 2025 state budget, announced a proposal to revise land tax rates starting January 1, 2026. Submitted to the National Land Council, the proposal also includes reclassifying certain rural lands into urban lands. This initiative follows a directive by Penang Yang di-Pertua Negeri Tun Ahmad Fuzi Abdul Razak, urging innovative strategies to enhance state revenue.

“The last land tax revision in Penang was in 1994. A dedicated task force is now reviewing 370,000 land titles to ensure a fair and balanced outcome,” Chow stated. The review, involving diverse stakeholder consultations, is expected to conclude by the end of 2025. The proposed changes aim to increase annual land tax revenue by RM50 million to RM100 million from 2026 onwards.

Chow also highlighted enhanced policies on lease renewal and ownership grants, introduced in 2023. These measures include discounts of up to 90%, benefiting 31 landowners in 2023 and 91 in 2024, with total premium reductions reaching RM170 million.

To streamline land management further, the state now allows simultaneous applications for land-use category changes or rezoning alongside lease renewals. However, these concurrent applications are contingent upon fulfilling rezoning conditions.

Through these initiatives, Penang aims to strengthen its fiscal foundation while fostering economic growth and social equity.