Buying Leasehold Property: Step by Step Leasehold Extension

Buying Leasehold Property: Step by Step Leasehold Extension

What is the step by step procedure of leasehold extension? It is good to understand the procedures so that we are able to analysis the pros and cons of leasehold property based on everyone’s unique investment portfolio.NATIONAL LAND CODE 1965

Referring to National Land Code 1965, Section 197, the lease must first be surrendered to the state government before applying for an extension. Below are the procedures of leasehold extension:

§  If the lease has expired: Submit “Permohonan Pemberimilikan Tanah” form (Application for Land Re-alienation). Note: Once the lease has expired, the property automatically reverts back to the state government and this allows anyone to apply for the land. Thus, it is very dangerous to let the lease expire.

§  If the lease has not expired: Submit “Permohonan Serahbalik dan Mohon Semula Tanah Untuk Tujuan Melanjutkan Tempoh Pajakan” form (application to surrender and re-alienate land to extend lease duration). Note: The lease extension can be opting for either 60 or 99 years.

§  To submit the land office:-

§  A certified copy of the land title

§  A copy of the current year’s quit rent receipt

§  Personal and land particulars

§  A copy of the latest assessment receipt

§  Two copies of site plans

§  A copy of the applicant’s identity card

§  Settlement officer (SO) will be sent to the area to check on the land status

§  A report will be prepared by the SO and planner for approval from state EXCO

§  To submit Form 12A for re-alienation after land office has received approval from the EXCO

§  If the application is approved, the land office will issue the “Notice that Land Revenue is Due” (Form 5A) to the property owner, who will have to pay the premium within three months of the date of the notice.

Normally the entire surrendering and re-alienating process takes at least one year due. Hence, property owners are advised to start reapplying for an extension at least two to three years before the lease expires.