State will not impose tax on vacant houses: Kerala finance minister
In its 2023-24 state budget, the state had said that it would revise the tax rates on properties and also levy additional tax on its huge number of vacant houses. The proposed tax on vacant houses had invited widespread criticism, especially from the non-residents
Following a protest from the non-resident community, the Kerala government on Wednesday withdrew its proposal to impose an additional tax on vacant houses and people having more than one house.
Replying to a question during the budget discussion, state finance minister K N Balagopal said it was only a proposal and the government has no plan to go ahead with it.
In its 2023-24 state budget, the state had said that it would revise the tax rates on properties and also levy additional tax on its huge number of vacant houses. The proposed tax on vacant houses had invited widespread criticism, especially from the Non-Resident Indians (NRIs).
“We understand reservations expressed by the expatriate community. We also received many petitions in this regard,” he said adding it was a proposal mooted by the local-self government ministry.
The minister also denied reports that the decision was taken under the pressure of the real estate lobby. “It is not true. Many NRIs shared their concern with me. It will affect expatriates in lower income groups, they told me. So we decided not to go ahead with it,” he said while replying to a question from Congress member Thiruvanchur Radhakrishnan.
Many NRIs have welcomed the government’s decision. “We are relieved. We are happy the government realised our concern,” said K V Sajith, settled in Bahrain. “The government cannot kill the goose that lays golden eggs. Happy, the government finally understood its folly,” said another NRI Kurian Abraham.
HT had carried a detailed story on this last week talking to many NRIs and many of them complained that “it was a punishment for pumping in enough remittances to the state.” They said the government’s proposal to impose an additional tax on vacant houses was a rude jolt and it was unfair to tax NRIs who earn enough for the country.
In Kerala, local bodies usually collect the property tax in two instalments and owners of vacant houses can submit an application to them after obtaining tax remission certificates based on the report of revenue inspectors and other officials but cumbersome procedure forces many NRIs to remit property and building taxes.
According to the local self-government department, at least 11% of over 10 million houses in the state are vacant, which is much higher than the national average of 7.45%. As per the latest data from the local self-government department, there are 18 lakh vacant houses across Kerala.
In the budget speech on Feb 3, Balagopal said the government was expecting ₹1,000 crore from tax reforms and it will be a big boost to local bodies.
People who supported the move said it was necessary to check the fragile environment and people who consider big houses as their status symbols should be penalised. They said these closed “ghost houses” were turning into a burden and they have to pay up.
Many nature lovers said extreme steps like this will discourage the building craze of Keralites.