Thiruvananthapuram: Properties at prime centres always sell at a premium as is the trend in the real estate market. In line with this market reality, owners of new buildings constructed in areas where roads or junctions were developed in the last 10 years need to dole out a higher property tax in Kerala.

Even the constructions in places where commercial and educational institutions have come up have to cough up the higher tax, which is up to 30% more than the basic rates.

The Government has directed the Local-Self-Government bodies to classify regions into primary, secondary, and tertiary regions based on various criteria. Different tax rates will be in force in each of the category regions in each local body.

The basis of classification
The primary region includes those areas where government or semi-government offices, commercial-educational institutions, markets, bus stands, hospitals, and the like are located or the developed ones. The areas surrounding them having the development potential comprise the secondary sector. The areas not included in the above two categories and which are relatively underdeveloped are included in the tertiary sector.

LSG bodies to initiate process
The governing councils of local bodies will convene meetings and decide the classification of regions and their boundaries on a temporary basis. A notice will then be issued, inviting complaints and opinions from the public. The local bodies need to obtain prior sanction from the Government by submitting applications, citing adequate reasons, to exclude areas from the primary sector. The secondary sector areas can’t be excluded in any manner.

The classification of regions need not be done on the basis of wards. The Principal Director of the Local Self-Government Department has directed local bodies to publish the final classification of regions after examining complaints and opinions of the public received within 30 days of issuing the notice and incorporating the necessary changes within 15 days by adhering to the provisions of the Property Tax Act.

All about the hike
The revised basic property (building) tax for buildings in panchayats with an area of up to 300 square meters (3,230 square feet) is Rs 6 to Rs 10/sqm. If the panchayat decides that the same is Rs 10, then the basic tax for a new house with an area of 112 square meters (1200 square feet) will be Rs 1,120.

The same will go up by another 30% if the house is located near the national highway, district headquarters, or first-category main roads. If the floor is constructed with vitrified tiles, marble, or wood, the owner needs to cough up another additional 15% tax. If the house wall is decorated with higher category material like wood, another 15% hike will be effected. If the house is air-conditioned, an additional 10% hike will be effected besides all these.

The Government has already hiked the tax rates from April 1, based on the total floor area and the usage of buildings. It was after 12 years that the basic rates are being revised on the basis of classification into panchayats, municipalities, and corporations. Besides these, the additional tax on the basis of regions is now being implemented. House construction costs have risen steeply in Kerala after the State Government increased the application fees, quarry fees, and related payments.

Delay in allocating number to new houses
The process of allocating house numbers to new buildings to determine tax will be delayed since the local bodies will take at least two more months to classify the regions as per the government order. Already complaints have started arising from many quarters on the delay in getting the house numbers.