KUALA LUMPUR, Nov 13 — An increase in assessment rates for properties in Kuala Lumpur is necessary because property prices have skyrocketed, a minister said today, even as opposition lawmakers claimed the rates have surged up to 267 per cent.

Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor said today it was unfair for the assessment rates to remain low and added that the rates would differ in various areas, but did not specify the figures.

“If a house used to cost RM80,000, but is now worth RM700,000, but the rate is still low, what are we going to do?” Tengku Adnan told reporters at the Parliament lobby here.

“That is what we want to balance. When we’ve balanced it, they will receive the appropriate rate,” he added.

The highest assessment rate increase was 267 per cent for a low-cost home in Taman Orkid Desa in Cheras, its MP Tan Kok Wai said in a separate news conference today.

“Obviously landlords will then increase their rental rates to pass this on,” the DAP lawmaker told reporters at the Parliament lobby.

Lembah Pantai MP Nurul Izzah Anwar, who was with Tan, highlighted that the previous KL Mayor Tan Sri Ahmad Fuad Ismail had raised revenue for the Kuala Lumpur City Hall (DBKL) without increasing taxes on properties.

“The taxes were not raised for the past 21 years as a matter of fact,” said the PKR vice-president.

Tengku Adnan said, however, that assessment taxes needed to be increased to provide funds for DBKL to carry out repairs, among other projects.

“It’s been said that the works carried out by DBKL did not live up to expectations. How can it live up to expectations when the price of everything has gone up? All sorts of problems are happening. We need to look for funds to give them what they need,” said Tengku Adnan.

“We want to increase taxes because KL properties have gone up. Secondly, with this increase in property prices, it’s not fair if we give it a low valuation. The sellers will not be able to sell them according to what they ought to receive with the price increase,” he added.

Tengku Adnan, who is also the Putrajaya MP, told Parliament later today that DBKL has sent out notices on the new assessment rates and asked them to respond by December 17, before fixing the new tax rates on January 1, 2014.

“We’ll receive objections before December 17 and we’ll adopt a win-win approach,” said Tengku Adnan in Dewan Rakyat.

“For your information, the increase will definitely happen, but there will be different rates. We’re forced to do this because the rates have not increased for 21 years,” he added.

Property prices in the Klang Valley have spiked in recent years, prompting the federal government to increase the real property gains tax in Budget 2014 to curb speculation.