Thiruvananthapuram: It is bad news for those who are going to enter into land transactions in Kerala after March 31. There will be an increase in the land registration fee from April 1 with the State Budget announcing a 10 per cent hike in the fair value of the land.
The decision to revise the fair value of land is likely to cause a corresponding rise in the land price in the high-density State where property prices come at a premium. The increase will have a huge adverse impact on those who show the market value of the land for availing housing loans.
There are chances of a flurry of land transaction activities happening in Kerala in the coming two weeks before the hike in fair value takes effect from April 1.
As per the revenue rules, 8 per cent of the fair value of land will have to be paid to the government as stamp duty and two per cent as registration fee during land transactions.
Total increase so far
It was in 2010 that the fair value of land was fixed in Kerala for the first time. The total increase in the fair value is now almost 199.65 per cent of the fair value fixed in 2010. For the purpose of easy calculation, 200 per cent is now levied. Once the new hike comes into effect, it will become 210 per cent.
It was after two years that the fair value of land was increased. Since there was no increase in fair value last time, many expected a 20 per cent hike. But the government restricted it to a 10 per cent hike. The government expects additional revenue of Rs 200 crore from the revision of the fair value of the land.
Minister's justification
It seems that the State Government is relying primarily on land-related revenue to shore up the finances of the State this time.
While justifying the move, Finance Minister K N Balagopal said that the market value of the land adjacent to the land already acquired for the development of National Highways, other main roads, and Metro Rail has gone up substantially, necessitating such a hike.
It has been decided by the government to form a committee to decide on the revision of the fair value of the land after rectifying the present anomalies.
Land tax to be costly for higher slabs
The land tax will also go up for all except for those who hold a very small area of land. Based on the land area, more slabs will be fixed, and for those who are in the higher slabs, a higher land tax will be charged.
Now, there are only two slabs in panchayats/municipalities and corporations for land tax. The plan is to introduce four slabs.
At present, those who are having up to 20 cents of land in panchayats or up to six cents of land in municipalities, or four cents of land in corporations are classified under one slab. Those who hold land above this scale are put in a higher slab.
So, when four slabs are introduced, those in the lowest slabs will be spared from the higher land tax. But there will be a substantial increase in land tax for those who come in the higher slabs.
According to the Minister, the hike in the land tax may go up to 50 per cent.
