Wednesday, January 2, 2013

Awas Renewal premium for property in Selangor


ON June 1, 2011, the Selangor state government implemented a new land policy designed to provide a more equitable renewal of residential leases for individual owners of property.

Prior to this scheme, there was substantial concern by owners of leasehold property that they would lose their homes when their leases expired, if they were unable to pay the relatively high premiums to renew their leases.

Many of those affected were senior citizens and early pioneer residents in Selangor who because of their age were unable to get loans to pay the premiums which were based on the market value of land according to the following formula:

Renewal premium = 1/4 X 1/100 X value of land (per square foot/metre without building as valued by valuation department) X leasehold period applied for (minus what you have left) X area of land

Based on this formula, the premium for a 3,000 sq ft property in Section 1 Petaling Jaya with 10 years left on the lease could amount to RM80,100 to top up to 99 years (if land was valued at RM120 per sq ft).

For a retired person it would be very difficult to raise this money without borrowing from the bank.

No comments:

Listen to Al Quran online

Listen to Quran