Thiruvananthapuram: The basic tax rate for construction of new buildings has gone up in the state. As per the new move, the tax levied per square metre for houses in gram panchayats has been increased from the existing Rs 3-8 to Rs 6-10. 

In municipalities, the tax on houses, which was Rs 6-15 per square feet, has been increased to Rs 8-17. Whereas in corporations, the rate has been hiked from Rs 8-20 to Rs 10-22. This hike was not mentioned in the budget but came into effect on April 1. With this, the property tax, fixed on the basis of the revised rates, will go up by five percent every year.  

Although local body officials state that the changes are applicable for new buildings, there is ambiguity as it is not clearly mentioned in the notification. Earlier, an order was passed hiking the tax rates for existing buildings by five per cent annually. 

With the revised tax rates for new buildings, there will be two types of building taxes in the state; one for those buildings constructed before March 31 and another for those constructed afterwards. 

Meanwhile, swimming pools, gymnasiums and turfs built as part of houses or hotels will be taxed in their respective categories. Tax rates have been reduced for bunks and roadside shops, while that of lodges and hotel buildings would go up. No significant hikes have been made for amusement parks. 

In case of houses, they have been categorised on the basis of square metres as those covering an area of 300 square metres and those above. The tax rates will vary for each category. Further, the revised rates for building construction permits, applications and scrutiny came into effect only a few days back. 

According to the government, the revision of tax rates is necessary to avoid differences in rates for new and existing buildings. The building tax rates should have been hiked by 25 per cent in gram panchayats in 2018 and municipalities in 2021. However, no hikes were made on account of the floods and pandemic. 

The building tax was raised five percent considering the demand of the local bodies, stated the department.