LECTURE 1

BPE 22703

INTRODUCTION TO
STATUTORY VALUATION

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 CONTENTS
This lecture covers the following
Topics:

1. What is Statutory Valuation?

2. Statutory Valuation in Malaysia

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TYPES OF PROPERTY VALUE
• freehold value
• leasehold value
• annual value
• depreciated value
• gross development value
• marriage value
• value in use
 PURPOSE OF VALUATION
Valuation is carried out for Land, Buildings
and Plant & Machinery for Taxation and
Non-taxation Purposes

Statutory Valuation refers to valuation for

tax purposes and compensation as provided by
the respective legislations

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TAXES THAT AFFECT REAL PROPERTY

• Stamp duty
• Real property gains tax
• Council tax
• Inheritance tax
• Income tax
 TAXATION

• Purpose – to finance Government

services
• Goal – redistribute income for nation’s
development
The taxation system must
therefore be efficient

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 TAX EFFICIENCY CRITERIA
• Fairness –
1. equitable distribution, and
2. based on ability to pay
• Certain
• Easy and Simple to understand
• Neutral and not a burden
• Ease of Administration

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 PRINCIPLES OF PROPERTY TAXATION
• Based on ability to pay
• Clear benefits
• Uniform basis of assessment
• Easy and economical administration –
cost effective
• Easy to understand
• Achieve social objectives

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 Gov’t. Administration in Malaysia
Federal System of Administration

3 tier system:
1. Federal Government
2. State Governments
3. Local Governments

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 Statutory Valuation in Malaysia
Authority Tax Statutes

Federal Stamp Duty Stamp Act, 1949

Gov’t Real Prop Gains Real Prop Gains Tax 1976
Tax
State Gov’t Quit Rent & Land National Land Code 1965,
Premium & respective State
Permits and Enactments
mining rights

Local Gov’t Rates Local Gov’t Act 1976

Dev’t Charges Town & Country Planning
Act 1976
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 THANK YOU
THANK YOU

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