New property tax regime for Kochi
Nov 06, 2013
Source : The Times of India

 

KOCHI: Almost 20 years after it revised the property tax for commercial and residential buildings in the city, the Kochi corporation is all set to implement an overhauled tax regime in two months, which is expected to swell their coffers by an additional Rs 20 crore next year. Currently, the civic body's annual levy from property tax stands at Rs 80 crore.

According to the old rental value-based system, building owners had to pay 15% of the annual rental value of the building, decided by the corporation, as tax. For buildings in each area, the corporation had a different annual rent value.

As per the new plinth-area based tax system, buildings have been divided into those for residential and commercial purposes. For residential buildings, Rs 20 will be the revised rate per sq m. But the tax amount will vary depending on roofing, flooring, the age of the building and road connectivity. For commercial buildings, the minimum tax per sq m has been fixed at Rs 90.

Residential buildings of 250 sq m and above will have to pay 15% extra if the flooring is made of luxury tiles and marble. Besides, 10% extra will be charged for buildings with centralized air-conditioning facility.

However, if the house does not have road connectivity or road width is 1.5m or below, no excess amount will be charged. But if the road width is between 1.51m and 5m, an additional 10% per will be charged. For connecting roads of 5m and above, consumers will have to pay 20% extra.

While there won't be any concession for buildings, which are less than 10 years old, buildings those are 10-25 years old will be given a concession of 10%. This will be 20% for those in the 25-50-year group and 50% for those above 50 years.

In order to implement the plinth-area based tax system, the whole area has been divided into three zones - primary, secondary and tertiary. While buildings located in secondry area will be given 10% tax concession, those in the tertiary area will get a 20% concession. There won't be any concession for area in the primary zone.

As per its plan to implement the tax system, the civic body is currently in the process of issuing new building numbers and furnishing data of buildings within its limits. Though the local body's plan was to complete the whole process by September, it has so far completed only 25% of the work. The local body is now aiming to complete the process of issuing new building numbers, number plates and forms.

The tax for each building will be decided on the basis of the self-assessed form submitted by building owners. However, prior to deciding the tax, physical verification of the building will be done to confirm the data furnished by building owners. The corporation is also planning to take strong against anyone found to provide false information after physical verification.

"The corporation will completely switch over to the plinth area-based tax system within two months. It will be implemented after physical verification of data submitted by building owners," said mayor Tony Chammany.

Meanwhile, the revised plan has come under criticism of the owners of commercial space. "As per the new plan, we will have to pay tax for the public area. In hotels, almost 35% of the area is public area, including verandas, toilets and the like. Instead of fixing tax on plinth area basis, they should have affected a certain increase to the present tax regime," said Jose Mohan, president, Kerala Hotel and Restaurants Association.

Though the property tax is to be revised every five years, the civic body is revising tax rates after 20 years.

 

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