Property tax may increase 5% annually, minimum rate Rs 75

Thiruvananthapuram: The annual minimum property tax in the State will be Rs 75 once the government implements its decision to bring small houses under the tax ambit of local self-government bodies.

The cabinet has decided to impose tax on houses with a plinth area of a minimum of 50 square metre (538 sq ft), based on the recommendations of the sixth Finance Commission's second report.

Currently, houses with a plinth area of 60 square metre (645 sq ft) are being taxed.

Local bodies are charging a property tax of Rs 3 to Rs 8 for houses in panchayat limits, Rs 6 to Rs 15 in municipalities, and Rs 8 to Rs 20 in corporation limits. Each local body could fix the amount within the approved range.

The government has announced that the houses with plinth areas between 50 square metre and 60 square metre will be charged only half the normal property tax. This will further reduce the tax amount.

Houses constructed after April 1 last and with a plinth area of more than 3,000 square feet will have to pay 15 per cent more of the basic tax. The tax will be fixed without considering the material used for flooring.

The government has also decided to increase the tax imposed on mobile towers. Currently, all local bodies are charging Rs 400 to Rs 500 per square metre.

If the government implements the commission's recommendation to revise the property tax annually, the tax is likely to increase by five per cent. Currently, the tax is being revised once in five years.

Though the former V S Achuthanandan-led LDF government had decided to reform the property tax structure in 2011 January, it was implemented later by the UDF government. The decision to collect the revised tax between 2013 and 2018 did not take off. Later, it was decided to collect the tax between 2016 and 2021.

Entertainment tax: Revision not implemented

The cabinet decision, revising entertainment tax to 10 per cent, is applicable to all shows to which entry is restricted based on the purchase of tickets. The government had decided to impose a 10 per cent tax apart from GST on movie tickets two years ago, but it was implemented due to the relaxation granted during the peak COVID-19 time.

Entertainment tax has been the main source of revenue for local bodies. The government's decision to withdraw the tax has led to a decrease in its revenue.

Property tax on houses (Probable rate)

Panchayat: Rs 75 - Rs 200

Municipality: Rs 150 - Rs 375

Corporation: Rs 200 - Rs 500

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