ADDRESSING THE ASSESSMENT BIAS IN THE MALAYSIAN LOCAL PROPERTY TAX ASSESSMENT

Abstract

An assessment bias happens when an assessed property signifies intolerable proportionate between the assessed and market values; reflecting its uniformity within the valuation list and possessing inequity across the group of properties defined by the value. To correct the assessment bias, local government usually revaluates its valuation list. While most other developed countries perform the revaluation whenever the assessment’s performance is intolerable, the Malaysian existing law urges the revaluation to be as a quinquennial event. Globally, local assessors use the standard ratio studies promulgated by the International Association of Assessing Officers (IAAO) to measure and evaluate the severity of the assessment bias. Adopting the IAAO standard, this research had performed the ratio studies in Hang Tuah Jaya Municipality for the fiscal year of 2017. The research had revealed a significant assessment bias between the lower-value and higher-value properties and other significant property feature that associated with the assessment bias.