Malaysia’s GPP PSB: A Catalyst for Urban Renewal, Offering Incentives for Development Projects


The Urban Renewal Implementation Guidelines (GPP PSB), introduced by the Ministry of Housing and Local Government (KPKT) last September, are set to transform Malaysia’s urban landscapes. As a strategic tool, the GPP PSB aims to entice developers and stakeholders to rejuvenate areas brimming with untapped potential, offering a range of attractive incentives.

With the upcoming Urban Renewal Act slated for presentation this year, the GPP PSB extends beyond a mere manual. It outlines specific incentives for urban renewal projects, divided into tax-based and non-tax-based measures, as per the documents shared by KPKT:

1. Tax-based incentives:

  • Exemption of development charges.
  • Exemption of Infrastructure Service Fund charge for residential projects.
  • Reduction in nominal land premium rates or special payments to government agencies, benefiting private developers.
  • Reduction or new assessment tax rates as incentives for buyers.

2. Non-tax incentives:

  • Increased development density or plot ratio.
  • Expedited processes for development and land affairs, including land use changes and lease extensions.
  • Accelerated approval for land works, including demolition of existing buildings.
  • Exemptions or reductions in construction components, in line with state policies on affordable housing provision.
  • Flexible and optimized provision of open spaces.

These criteria aim to guide developers in implementing urban renewal initiatives effectively.

Potential Areas for Urban Renewal: KPKT has identified several potential areas for urban renewal, categorized based on specific characteristics:

  • Brownfield areas: Including dormant buildings, unsold structures, former mining sites, and old depots or public transportation stations.
  • Greyfield areas: Encompassing underutilized buildings, areas where land value surpasses the value of existing structures, and zones unsafe for occupation yet lacking development potential.
  • Populated areas: Covering city squatter settlements, old residential areas, infill development zones, both strata and non-strata residential areas, and disaster-prone city regions.

Remarkably, the Kuala Lumpur City Hall (DBKL) has pinpointed 139 potential areas within the city for urban renewal under the Kuala Lumpur Structure Plan 2040 (KLSP2040). Of these, 91 are residential sites, showcasing a significant scope for redevelopment to enhance the city’s living and environmental conditions (see KLSP2040 image below).

The KLSP2040 document further suggests that the impact of potential redevelopment could extend beyond these 139 areas, promoting a more attractive and vibrant environment in Kuala Lumpur.

For detailed information on GPP PSB, the document is available for download from the PLANMalaysia (Town and Country Planning Department) website. The KLSP2040 can also be accessed on the DBKL website, offering a comprehensive view of the planned redevelopment areas.

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