CPPR Senior Associate Anu Anna Jo commented in the news published on Times of India (06 February, 2024)
In the state budget, finance minister K N Balagopal has proposed levying land tax from apartment dwellers for their undivided share of land on individual ownership basis.“Residents of flats and apartments have been demanding assessment and remittance of land tax for their undivided share of land on individual ownership basis and the land tax rates on such undivided share of land on individual ownership basis would be appropriately fixed and levied in the state,” the minister said in his budget speech.
But the fresh move is expected to negatively affect apartment projects in the state. At present flat owners’ associations in respective apartments are paying the tax in the name of the owner of the land.
Centre for Public Policy Research (CPPR) senior associate (research) Anu Anna Jo opined that the proposal to levy tax for undivided share of land on individual ownership basis would discourage the purchase of flats. “Apart from an additional burden for flat owners, the new system would encourage people to purchase land and own a home in their own land, especially when the interim budget of Union govt announced various schemes to promote housing projects for middle class,” she said. “It will also have a negative impact in a state which has land constraints,” she added.
Madhu U K, Kochi-based real estate expert, said that the proposal for imposing tax for undivided share of land will make the entire tax system in this regard more complicated and it would be an additional burden for flat owners.
The minister also announced revision of fair value of land after 13 years. “Fair values of lands in state were determined in 2010. The fair value had been increased by a fixed percentage from time to time thereafter. Considering the developments in the state and increase in market value of lands after 2010, fair value of lands would be revised in an appropriate and judicious manner. Along with such revision of fair value, the land tax would be levied also factoring the use to which the land is put to,” the budget speech says.
Views expressed by the author are personal and need not reflect or represent the views of the Centre for Public Policy Research.