Building tax structure may undergo revamp

Plinth area-based self-assessment tax system may go

The building tax structure in urban civic bodies is in for a major revamp.

The plinth area-based self-assessment tax system introduced by the previous Left Democratic Front (LDF) government will be replaced with a new model sans punitive provisions for delayed tax payment.

The five per cent annual revision in force will be substituted with a five-year revision system with flexible slabs and no cumulative increase.

Recognised schools and their hostels will be eligible for a complete tax waiver. The proposed tax scheme of commercial buildings will range between 25 to 200 per cent and residential buildings between 25 and 60 per cent.

Rented building

A 50 per cent increase has been mooted in the case of buildings given on rent. Tax rates will be revised from time to time depending on the nature of usage of each building.

If a commercial building is used for residential purposes, the tax rate too will be different. Similarly, the building owner will not be taxed for the additional facilities installed at the expense of the tenant.

Periodic assessment

Periodic assessment has been suggested to find out whether a building is used for commercial or residential purposes.

The self-assessment system would be made optional. The assessment forms will be simplified and the officers concerned will have to call on the tax payers who do not have the system to abide by the self-assessment system.

A consultative committee appointed by the government for reviewing the tax structure has submitted its proposals to Urban Affairs Minister Manjalamkuzhi Ali.

While revising the tax after a span of 19 years, the previous government had fixed the tax rates for buildings on the basis of their accessibility to roads and other infrastructure facilities.

The 300-odd classification of roads will be completely altered and this will naturally lead to a change in the rates too.

The assessment officer will have to serve a demand notice to every tax-payer regarding the projected rate for the next five years.

The notice will bear the officer’s name so that anyone can go on appeal regarding the furnished rates.

Amendments likely

Amendments will be made to the Kerala Municipality Act, 1994, to facilitate the change in the tax structure. The consultative committee report will be placed at the Cabinet for clearance. The government would promulgate an ordinance soon for amending the rules and rates, sources said.