Kerala govt dilutes tax hike for luxury homes
Mumbai: After Kerala state cabinet approved the suggestions of the sixth State Finance Commission to impose a higher tax on homes which have a plinth area of more than 3,000 sq ft or, such homes will now be taxed under the classification of ‘luxury houses’ and taxed at rates higher than property tax.
While State Finance Commission proposed an increase of 50-200 percent tax based on area of the house ranging between 3000 sq ft and 10,000 sq ft, Kerala government has revised the recommendation and plans to levy only 15 percent tax for all houses with plinth area more than 3000 sq ft.
The State Finance Commission had proposed the high tax slabs for luxury homes built after 14 January 2011 and government revised this timeline and proposed to levy additional tax on luxury homes constructed after April 1, 2022. The Revenue Department is already collecting a one-time luxury tax for new constructions with a plinth area over 278.7 sq m and the rate starts at Rs 4,000.