Statutory Valuation: Rating, Taxation and Compulsory Acquisition
What the exam tests
This domain tests statutory valuation for rating, taxation and compulsory acquisition. You must distinguish statutory definitions from market value and apply the correct compensation heads.
Core rules
- Rating: local authorities prepare valuation lists and assess rates on annual value under the Local Government Act 1976 framework. Annual value is generally the estimated annual rent, with statutory deductions; it is not the same as market value.
- Taxation: stamp duty is ad valorem under the Stamp Act 1949; real property gains tax is charged under the Real Property Gains Tax Act 1976. Valuations may support tax compliance, but the statutory basis controls.
- Compulsory acquisition: under the Land Acquisition Act 1960, compensation may include market value of the acquired land, severance and injurious affection, and disturbance. Assess at the acquisition date, not with the scheme's post-acquisition effects.
Worked example
A 10-acre industrial holding is compulsorily acquired in part. Before taking, the whole is worth RM10.0 million. The 2-acre taken portion has a market value of RM2.5 million. The residue after taking is worth RM7.0 million; before taking it would have been worth RM7.5 million. Severance = RM7.5m − RM7.0m = RM0.5m. Compensation before disturbance = RM2.5m + RM0.5m = RM3.0m. Add proven disturbance and statutory items; do not add the whole holding's value again.
Traps
Using post-acquisition values; double-counting severance; ignoring disturbance evidence; applying market value where the statute requires annual value; and confusing stamp duty with RPGT.