Building tax assessment kicks up a row

Newbie Joined: Jan 02, 2009 Posts: 1

Controversy over the method in which building tax is to be assessed for flats and other apartment complexes is raging in the State with the builders and the Revenue officials assigned for the job locking horns over the interpretation and implementation of the provisions of the law.

The mammoth process of assessing the building tax of apartment complexes began following the decision of the State Government to bring all the flats in the State under the tax net.

K.P. Rajendran, Revenue Minister, has directed the officials of his department to take stock of the situation in three metros - Thiruvananthapuram, Kochi and Kozhikode - and complete the process by the year-end. The decision of the State Government to bring the flats under the tax net was prompted by the realisation that the majority of the flats in the State were not assessed for tax. While announcing the decision, the Revenue Minister stated that only eight flats were assessed in Kochi.

It is the question of how to consider the flats for assessment - as one single unit or separate apartments with separate door numbers - that is being debated now. While the builders argue that each apartment in a complex should be assessed individually, the Revenue officials argue that separate assessment would be possible only when the builder succeeds in proving that the revenue for the construction of the individual units were generated from the individual Kerala apartment owners.

The assessment of building tax is made on the basis of various provisions of the Kerala Building Tax Act 1975. On completion of the construction or after a cut-off date, buildings are assessed and the tax fixed based on the plinth area of the building. The cut-off date or the appointed date for assessing building tax, which is a one-time payment, for Kerala, has been fixed as February 10, 1992.

According to the present rate of building tax, a house of plinth area below 1,000 sq.ft. need not pay building tax. For houses with plinth area from 1,000 to 1,500 sq.ft., the building tax will be around Rs.2,000, for the 1,500 to 2,000 sq.ft. category, it will be Rs.4,000 and Rs.8,000 for the 2,000 to 2,500 sq.ft. category. If the apartment or the house has a plinth area of more than 2,500 sq.ft. it will attract additional tax at the rate of Rs. 1500 per every 100 sq. ft.