What is Land Conversion or AVTC (Application for Variable Title Condition)?
AVTC* is a term used in Sarawak. West Malaysia, it is called land conversion. The fee is called premium or additional premium on conversion. Usually in land development, it is part of the development charge. Most of the case 30% of the increase in value of the land (West Msia). The theory of how it is calculated is mentioned in JPPH website on Valuation during application for change in title condition. The part of the law is S.124 of the National Land Code. See JPPH website here.
*AVTC - Application for Variation of Title Condition?
It is a process whereby a registered proprietor applies to change the usage of the land from one purpose to another. It is also known as land conversion. (Land and Survey Sarawak)
Land Conversion involves payment of premium or additional premium. It is like you convert your Van from a private vehicle into a School Bus. So, for land conversion, usually it needs a qualified consultant who will submit on his/her behalf the proposal to the Superintendent of Land and Survey Department of the Division (in the case of Sarawak) in which the land is situated for consideration by the government. Land is a state matter, hence State Authority has the final say. The additional premium is calculated based on a formula, varied between state to state.
This premium also depends on the number of years that the lease for such use is to be given. Of course, the varied use of land is due to demand. For example, there is a need of commercial use for the bungalow (residential) along the busy road of city. They can be used as restaurants. The value of land use as commercial (restaurant) is much higher than use as residential house. This difference in value will be levied a premium in the calculation. Meaning, a percentage of this increase in value will have to be paid.
The rates of additional premium payable is based on a Percentage of the Market Value of the intended conversion. For example, a conversion from agriculture use to residential use will attract additional premium of 50% of the market value of that land. Take for instance, the MV of the land around the same location is RM50,000 per acre, and a conversion from agriculture use to residential use will need an additional premium of RM25,000 per acre.
Detail of the rates refer to the reference link below.
Also, RLL (Renewal of Land Lease) is another common application when leasehold land is nearing expiry date. In Sarawak, this is different from other states. There is a standard rate according to below table.
Premium rates for conversion of land use category refer to link below.