Now, houses above 538 sqft under property tax ambit in Kerala

Thiruvananthapuram: The state cabinet has decided to bring in houses above 50 square metres (538 square feet) within the ambit of the property tax, levied by local bodies.

Taxes are currently levied for houses more than 660 sqft. Half the normal rates will be levied as tax for houses with a floor area between 50 sqmt and 60 sqmt.

Houses, built after April 1 and with a floor area of above 3,000 sqft, will have to pay 15 per cent additional tax over the base tax.

The Cabinet on Wednesday approved the recommendations in the second report of the sixth Finance Commission. It was also decided to conduct property tax revision annually from the next financial year onwards.

A GIS system will be introduced to collect tax on a regular basis.

However, the decision to set a ceiling for increasing the tax for buildings in certain categories was withdrawn.

Property tax is an ad valorem tax paid by the property owner to the local government.

Other changes

The Kerala Cabinet has also decided to introduce several new measures as part of the efforts to streamline tax collections. Among the major recommendations is increasing the upper limit of waiving tax arrears which local bodies could not collect due to reasons beyond their control. Another decision is to revise the rate of taxes levied on mobile towers.

Demolition of buildings

The Cabinet has also suggested restoration of Section 241 of the Kerala Municipality Act under which the owner of a building has to inform the local body about any plan to demolish the structure. Otherwise, the owner should pay taxes till the matter is reported to the local authorities.

Entertainment tax

Software will be prepared for local bodies to calculate entertainment tax and distribute tickets in movie theatres. Meanwhile, theatres using own software have been instructed to develop bridge software to transmit data to local bodies.

Other taxes

In yet another decision, the Cabinet has instructed that licence fee should be collected for displaying advertisement boards placed on the sides of roads.

Similarly, the local bodies would be granted powers to waive property tax up to 10 per cent in buildings owned by them. This decision is expected to benefit persons belonging to Scheduled Castes and Tribes as well as startups.

Grievance-redressal mechanism

Addressing a major demand from the people, the Cabinet has also suggested the setting up of a special team at Information Kerala Mission headquarters to solve the complaints of tax payers within a few hours.

Instructions have also been issued to revise the tax structure at the earliest and make the data base up-to-date. Moreover, the land taxes in rural as well as urban areas have to be streamlined by March 31 next year.

At the same time, local bodies should utilize GIS facilities to tap all tax and non-tax revenue sources, said the Cabinet.

Luxury tax may go up by 50% along Kochi Metro Line

A luxury tax increase is mooted for houses within 1 km along both sides of the metro line from Aluva through SN Junction in Thrippunithura.

At present, the luxury tax applies to houses with a built-up area of more than 278 square metres. As per the revised tax rates, annual luxury tax of Rs 5,000 has to be paid for buildings with an area ranging from 278 sq m to 464 sq m. Once the proposed increase is implemented, this would rise to Rs 7,500 per year.

Currently, the luxury tax rate for the buildings with an area ranging from 464 to 695 sq m is Rs 10,000 and those above 695 sq m attract a tax of Rs 12,500.