Kerala Property Tax – The Incredible Guide of 2024

Kerala is one of the southern states of India which is famous for its backwaters, cultural heritage, and literacy. Apart from these, it is also known for progressive governance and has an organized system of property taxes. 

Property tax is considered one of the important sources of own-source revenue for the local government, which aids in the delivery of various services including infrastructure, education, and health sectors. 

It is important for the people of Kerala, especially homeowners, companies, and investors to know how property tax is calculated and collected.

This blog post will give you detailed information about the calculation of Kerala property tax, how and where to pay/collect tax, exemptions, penalties, and all the roles played by Kerala property tax for the development of Kerala state.

What is the Kerala Property Tax?

Kerala property tax is a tax that is paid by the owner of a property to the local government or municipality of Kerala. It ranges from the value of the property to the type of property, its location, and its use. 

Kerala property tax as a revenue collection tool is widely used to address the maintenance and development of infrastructure such as roads, government parks, sewage systems, and others. 

Kerala property tax is administered through local self-governing bodies such as municipalities and corporations. The legal tool used to govern the assessment and collection of property tax in the state of Kerala is within the spirit of the Kerala Municipality Act 1994.

What is the Importance of Property Tax in Kerala?

Kerala property tax plays an important role in the process of building the urban/rural infrastructure of the Kerala state. Some of the major benefits of property tax collection are as follows:

• Financing public services: Local government revenue from property tax is used to finance the maintenance of basic social infrastructure such as roads, street lighting, drainage systems, and water supply. 
• Urban planning and development: The revenue also helps in formulating development strategies for the maintenance of urban areas, infrastructure as well as localities in particular. 
• Health and sanitation: Such property taxes are levied to provide additional cash to local governments, which is channeled into areas such as sanitation, waste collection, and health including hospitals. 
• Education: This fund helps in maintaining and developing local government-owned and governed facilities, and educational establishments. 
• Economic stability: Timely collection of property tax enables local governments to have better financial discipline, thereby increasing the chances of efficient delivery of services.

Who Should Pay Kerala Property Tax?

Any person or organization owning property in the state of Kerala, whether used for residential, commercial, or industrial purposes, must pay property tax. 

Property tax, i.e. the costs associated with property ownership, are obligations that are unquestionably borne by the property owner and not the tenant. Property tax is applicable on the following:

• Residential properties: Houses, flats, apartments, villas, and other forms of residential dwellings.
• Commercial properties: Shops, offices, hotels, and other commercial spaces.
• Industrial properties: Factories, warehouses, and other industrial setups.

How is Kerala Property Tax Calculated?

Kerala property tax is calculated based on several factors, including:

• Annual Rental Value (ARV): One of the many considerations that are utilized in the assessment of property tax is the Annual Rental Value of the said property. ARV or Actual Rental Value is derived from the amount that a property can be realistically rented out per year. It is determined by the different local government bodies that are in place.
• Property usage: The type of property whether residential, commercial, or industrial defines the way in which property tax is charged.
• Property area: Another factor that works towards the computation of the tax is the size of the property particularly the built-up area of ​​the property.
• Location: The taxation of properties also depends on the classes or regions of the properties where urban properties attract higher taxes than rural properties because of the services such as well-developed infrastructure among others.

The formula used to calculate Kerala property tax is: 

Property Tax = Annual Rental Value (ARV) × Tax Rate

The tax rate is different for each country and depends upon the type of residence one owns. Therefore, it is necessary to address the particular municipality or corporation in order to establish what real estate tax rate applies to this or that property.

What are the Advantages of Kerala Property Tax?

Kerala property tax offers several advantages to property owners and the community as a whole. Here are the key advantages:

• Legal Ownership Recognition: The property tax is a vital imposition that lets local authorities recognize the legal ownership of the property if one pays it regularly. It has legal recognition and legal evidence of ownership and this may be of great use, especially in the event of a dispute on the property or in the process of selling the property.
• Improvement of Civic Amenities: Property taxes are the leading means of local municipal source of revenue. These funds are utilized for developing civil infrastructures including repair of roads, streetlights, drainages, water supply, and other physical development within residential and commercial ventures.
• Tax Deductions and Benefits: In some situations, the property owners can manage to work out tax deductions on home loans depending on the amount of property tax paid.
• Incentives for Early Payment: It is common for municipalities in Kerala to allow property owners to obtain early payment or on-time payment rebates or discounts, this is because late payments attract so many fees.
• Facilitates Property Transactions: Again, payment of such tax is continuous so as to ensure that the property does not have any outstanding charges, which is important in any conveyance such as sale, lease, or transfer. Soon registering a property or getting legal clearance, shortens the duration required for the whole process.
• Community Development: These types of taxes are used to pay for local necessities that include colleges and universities, parks and recreational centers, police and fire departments, schools, and other services among others. Basically, property owners are encouraged to contribute to the improvement of their area by paying property tax.
• Penalty Avoidance: To make sure that they do not receive threats of legal actions that might be involved in cases of non-payment of property tax, property owners make payments for the taxes for their properties on a regular basis. Local government can also issue penalties of fines or take legal proceedings in an endeavor to recover outstanding amounts to be paid in taxes.
• Improved Local Governance: Property taxes support local authority and the process of delivering services at a local level. The collected tax assists local bodies to have their own revenues hence improving their performance in governing and addressing problems affecting local chiefdom.

Which Type of Properties Taxed by Kerala?

Kerala property tax is levied on various types of properties in Kerala by local municipal bodies such as corporations, municipalities, and panchayats. The types of properties that are taxed are as follows:

Residential Properties

• Houses and Apartments: Residential houses, bungalows, and apartments that belong to owners or a group of people are taxed under property tax.
• Flats: Tax is specifically levied on multi-story residential building that comprises an individual residential unit within a complex.
• Villas: Other types of property that constitute the residential property tax system include luxury villas or community homes of people.

Commercial Properties

• Shops and Offices: Tax is levied on buildings used for business, stores, offices, showrooms, etc.
• Shopping Malls: As expected, property tax is also applicable on large commercial buildings and malls.
• Hotels and Lodges: These include hotels, guest houses and lodges that are classified as commercial buildings, hence commercial tax rates are applicable on these.
• Warehouses and Storage Facilities: Properties that are used for storage or warehousing come under commercial property tax.

Industrial Properties

• Factories and Industrial Units: This is a property tax that is levied on building structures that comprise industries or any other production line.
• Workshops and Sheds: This also includes workshops, machine sheds, and other small-scale industrial buildings.

Vacant Land

• Empty Plots: Other real estate is also subject to this tax and includes any land that is unused or vacant but is located within the urban or municipal limits of the country and may be subject to a different tax rate than developed properties.
• Agricultural Land within Municipal Limits: Most agricultural land is classified as exempt, yet some may be taxed as an Operational Assertion Area if it is used for purposes other than agricultural purposes and is located in municipalities.

Government Properties (Limited Cases)

• Government-owned buildings may be taxed if they are being used for commercial purposes or if they are rented out for use by other individuals.

Institutional Properties

• Schools and Colleges: Property tax may be levied on private colleges or schools, especially if they are running their business independently, but government colleges or schools in the country may be exempted from this.
• Hospitals and Clinics: Private hospitals, clinics, and any other medical centers are also subject to the tax.
• NGOs and Charitable Trusts: Sometimes, properties owned by NGOs or charitable trusts are also subject to property tax as per the use of the house.

Rental Properties

• Any property, whether for residential purposes or for business, is subject to property tax if it is rented out. The rate may be fixed on the rent received or may vary depending on the type of tenant.

What is the Kerala Property Tax Bill?

The Kerala Property Tax Bill is a statement that is provided to the property owner and contains the amount of tax payable for a financial year. The key elements include:

• Owner Details: Name and address of the property owner.
• Property ID: Serial number used to identify the property.
• Property Information: Property characteristics including location, size, and type of property.
• Tax Calculation: Breakdown of the tax amount in relation to the property value and tax charges.
• Total Due: Any tax payable to the state, any past dues or interest thereon.
• Billing Period: Number of years for which the tax is payable.
• Due Date: The day after which payment must be made after which penalty will be charged.
• Payment Options: Internet, bank, or, municipal office payment options.
• Discounts/Penalties: Special discounts are offered to a buyer who pays the seller earlier than usual or special charges are levied if payment is delayed.

How to Pay Kerala Property Tax Payment?

Kerala property tax can be paid both online and offline. Here’s a step-by-step guide for both methods:

How to Pay Property Tax Online Kerala

Online payment is the easiest and most convenient method. Here’s how you can do it:

Steps for Online Payment:

Visit the Official Website:

Visit the portal of the local corporation, municipality where your property is located, or the panchayat you are a resident of. For example:

• Thiruvananthapuram Corporation: www.corporationoftrivandrum.in
• Kochi Municipal Corporation: www.kochicorporation.lsgkerala.gov.in
• Kozhikode Municipal Corporation: kozhikodecorporation.lsgkerala.gov.in

Login or Register:

• If you already have an account, log in with your credentials.
• If you’re a new user, register by providing details such as your name, property identification number (PID), and contact information.

Locate Property Tax Payment Option:

• On the homepage, simply type the words “Property Tax” or “Online Tax Payment”.

Enter Property Details:

• Do insert your Property Identification Number (PID) or the other necessary details of your property to obtain your outstanding amount of tax.

Verify Tax Amount: 

• Examine the property characteristics and tax amount which is expected to be paid.

Make Payment:

• Select the type of payment process you desire- credit/debit card or net banking, UPI or mobile wallets and proceed with the payment.

Download the Receipt:

• To print or download the payment receipt, do so after making payment for future use.

How to Pay Property Tax Offline in Kerala

For those who prefer offline methods, property tax can be paid directly at designated locations.

Steps for Offline Payment:

Visit the Local Municipality Office:

• Go to the nearest office of the Corporation, Municipality, or Panchayat in the area where your property is located.

Collect the Property Tax Bill:

• In case, you did not receive the property tax bill at your address, then you can ask for a photocopy from the office. Give your PIN or details of your property that you want a survey on or insurance to be done for.

Verify the Tax Details:

• Check the tax amount due and any applicable penalties or discounts for early payment.

Choose Payment Mode:

• Payment can be made using:
  • Cash
  • Demand Draft (DD)
  • Cheque (Make sure to confirm the accepted modes of payment at your local office)

Make the Payment:

• Pay the due amount at the payment counter of the office.

Get the Payment Receipt:

• Collect the receipt for your records after making the payment.

Payment Through Banks (Some Regions)

In some municipalities, property tax can also be paid through designated branches of banks that have tied up with the local authorities. The process typically involves filling out a challan form at the bank and making the payment at the bank counter.

What is the Due Date of Kerala Property Tax?

Generally, residents of the state pay kerala property tax on a half-yearly basis. The due dates for property tax payment in Kerala are as follows:

• First Half: Remittance is required to be made on or before 31st September of the following year for the period April to September.
• Second Half: Remittance is required for the period October to March and should be made no later than 31st March.

Inability to pay such taxes on these normal dates may also result in some other costs such as penalties for unpaid property tax. Also, some local bodies offer incentives to customers by way of discounts or concessions for making early payments. For more area-specific information, one should contact the local municipal corporation or panchayat to get more information about specific dates.

How to Change Name in Kerala Property Tax?

To change the name on a Kerala property tax record in state, you need to follow these steps:

Get the application form: You can also get this form from the local municipal office, or panchayat office and even download it from the official website of the respective municipality under the heading ‘Name Change Application Form – For Property Tax Records’.

Fill out the form: Fill in the fields with relevant information like details of the current owner, their address details, and the new name.

Attach the required documents: 

• Proof of ownership: Photostate a copy of the sale deed, gift deed, or any other document that proves the ownership rights of the person.
• Latest property tax receipt: Most recent utility bill: electricity, water, or gas.
• Identity proof of the new owner: Xerox copy of the new owner’s identity proof for the premises (Aadhaar card, voter ID card, etc.).
• No objection certificate (NOC): NOC must be obtained from the previous owner, if any.
• Mutation certificate or affidavit: A mutation certificate or affidavit detailing the change in ownership or business name.

Submit application: Attach the documents mentioned above along with the filled form and submit them to the concerned municipal office or panchayat in the area.

Pay processing fee: In some cases, you may have to pay a processing fee for children’s name change requests.

Verification process: Finally, the officials will check the references as well as the submitted documents and may also visit the site to confirm the information provided.

Get confirmation: After verification, the name of the property will be changed in the property tax records and you will get a new property tax statement or confirmation letter.

How to Search Kerala Property Tax by Name?

To search for Kerala property tax details by name in Kerala, you can follow these steps:

• Visit the official website: Visit the website of the concerned local body which can be a Municipal Corporation, Municipality, or Panchayat depending on the location of the property.
• Go to the Property Tax section: Although it may differ slightly, the logo or title will be something like “Property Tax” or “Online Services”.
• Select the Search by Name option: Choose the link that allows you to view the property tax information with the help of the property owner’s name.
• Enter property owner details: Don’t just provide the property owner’s name but also the ward number, property ID, or any other details that make the property unique.
• View Property Tax Details: It will also show property tax information such as future balances, payment history, and everything that the latter authority wants to show to the public.
• Download or Print: It is possible to download or print the tax statement depending on the need to refer to it or make the payment.

What is the Age Factor of Kerala Property Tax?

Age factor in Kerala property tax under which the property owner is allowed to pay a lower amount of property tax based on the age of the respective building. 

Generally, older structures are put under a lower tax rate as structures lose value over time. Municipalities take into account the depreciation that occurs over time, hence reducing the taxable value of the property.

• Old Buildings: Older properties are also entitled to tax concessions, especially due to depreciation.
• New Buildings: Newly constructed buildings are generally taxed more than older ones as the latter have a higher assessed value.
• Depreciation Calculation: Tax authorities work on the basis of the age of the building and change the tax based on that. However, older properties are allowed to depreciate or reduce their taxable value faster.

The actual amount given as depreciation may also vary according to the specific area of ​​the municipality as well as the type of property concerned.

What is the SUC in Kerala Property Tax?

SUC in Kerala property tax stands for Service User Charge. It is a charge that municipal authorities demand from citizens for the use of civic amenities such as water supply, garbage collection, as well as sanitation services.

Key Points:

• Purpose: SUC also helps contribute to the cost that includes essential municipal services received on the property such as garbage disposal and removal, sewage services, street cleaning, etc.

• Different from Property Tax: SUC should not be confused with regular property tax and is usually described in an additional section of the property tax statement.

• Varies as per service: Adopted from Dalton’s findings, the amount of SUC depends on the type and level of service offered by the local body.

What are the Tax rates and Slabs of Kerala Property Tax?

The complete table of tax rates and rates of Kerala property tax is given below:

What is the Zone List of Kerala?

The complete table of zone list of Kerala Property Tax is given below:

What are the Penalties for Late Payment of Kerala Property Tax?

As a result, homeowners who do not pay property tax on time in the correct tax year face penalties and interest. Penalties for delayed payment usually include: 

• Interest on outstanding amount: A portion of the outstanding tax amount is charged as interest and it keeps on increasing. 
• Legal action: Repeated non-payment of property tax leads to legal suits being filed by municipal authorities and the property can be sold or sealed. 

The above penalties mean that it is important for property owners to pay their taxes so that they do not attract these surcharges.

What are the Exemptions and Concessions in Kerala Property Tax?

There are certain types of properties and owners in Kerala who may be entitled to exemptions or concessions on property tax. These exemptions are given based on the purpose for which the property will be used and who owns it. Some common exemptions include:

• Government properties: Property owned by the state or central government is generally not required to pay property tax.
• Charitable institutions: Property owned by a charitable institution for non-independent use may be exempted from paying property tax.
• Religious properties: Buildings used for religious purposes such as temples, churches, mosques, etc., and any other property that is used for religious purposes are not subject to property tax.
• Agricultural land: Agricultural land used for the purpose of farming may be given tax benefits or exempted from property tax.

Anyone who owns a property should ensure that he consults the local municipality for any exceptions or special provisions.

What are the Tax Reforms of Kerala Property Tax?

This state has tried to bring in Kerala Property Tax reforms from time to time so that there is efficacy in the process and also more acceptability. These reforms include:

• Digitization of property records: Digital applications have been introduced to allow property owners to make their payments online, eliminating the need for them to visit different municipal offices.
• Regular update of property assessment: Officials keep revising property values ​​constantly so that they can levy taxes in accordance with the current price trends in the property market as well as municipalities.
• Introduction of self-assessment: Moreover, property owners can now easily assess the amount of taxes payable through online business tools and hence the chances of disputes are reduced.
• Transparency in tax rates: Municipal authorities in Kerala provide ample details about the tax charges and the way they are calculated, making it easier for property owners to determine how much tax they will have to pay.

What are the Challenges in Kerala Property Tax Collection?

Despite the improvements in kerala property tax collection systems, several challenges persist:

• Non-compliance: Most property owners are either unable to pay property tax on time or do not pay at all, causing huge revenue losses to local bodies.
• Discrepancies in property records: Sometimes, transfers may not be recorded, and this results in incorrect valuation of properties.
• Tax evasion: Some property owners may undervalue their property, or they may decide to misuse exemptions to pay minimal tax.
• Limited awareness: Some property owners may not be fully aware of their tax liabilities or the importance of paying property tax, especially in rural areas.

Overcoming these barriers requires continuous action by local governments, including raising awareness, enhancing enforcement, and revising the tax assessment system.

What is the Future of Property Tax in Kerala?

The future of Kerala property tax looks favorable with additional application of technologies, higher compliance, and tax changes. Key trends shaping the future include:

• Increased digital integration: The technology used and implemented by municipalities is expected to progress and increase the integration of comprehensive digital property tax collection, tracking, and record-keeping systems.
• Data-driven assessments: The trend of using real property data for assessing property taxes indicates that more data-based assessments will be implemented to improve tax accuracy.
• Increased public participation: The government can urge people to contribute more through incentives for timely payments or by creating ways in which property owners can easily resolve problems and thus access services quickly.
• Strengthening tax enforcement: Higher levels of enforcement can be adopted in the form of fines for non-compliance with tax laws and possibly frequent assessments to ensure property owners pay their taxes as required.

In Conclusion

Kerala property tax is one of the important revenue sources of local governments that goes towards funding vital public services and infrastructure. 

Today and with the constant growth of reforms and the rise of technology, paying property tax in the region of Kerala is easier than ever. It is the responsibility of the housing company and property owners to pay the bills on time, but avoid certain penalties that can encourage the development of the state. 

Therefore, as this system becomes widespread, Kerala property tax will continue to be an important tool to increase the standard of living of the people of this region.

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