THIRUVANANTHAPURAM: In a welcome move for aspiring home owners and developers, the state government on Wednesday brought in a significant reduction in building permit fees. The new permit fee rates, which will come into effect on August 1, offer cuts of up to 60% in corporations and 50% in panchayats, Local Self-Government Minister M B Rajesh told reporters in Thiruvananthapuram.
The government decided to enforce major cuts in permit fees after the CPM state leadership intervened in the issue. The recent party state committee meeting discussed the matter and observed that the hike in permit fees, introduced last year, had put additional burden on the people. The hike had invited severe criticism from different corners. Considering these aspects, the government took the decision.
Announcing the reduction at a press conference, Minister Rajesh said, “The new rates will see at least a 50% reduction in permit fees for residential buildings ranging from 81 to 300 square metres in panchayat areas. For buildings between 81 to 150 square metres, the permit fees in corporations will be reduced by 60%. The permit fees for houses per square metre will be reduced from Rs 50 to Rs 25 in panchayats, from Rs 70 to Rs 35 in municipalities and from Rs 100 to Rs 40 in corporations.”
The government has introduced a 5% rebate for property tax paid by April 30. According to the norms mandated by the Central Finance Commission, the own fund or revenue of local bodies should grow in proportion with the state’s GDP in order to get grants, he pointed out.
“As many as 24 municipalities in the state have failed to meet these targets, leading to the loss of grants from the Finance Commission. Both the Comptroller of Auditor General and the Finance Commission have urged the state to take urgent measures to increase the own fund of the local self-government institutions,” Rajesh said.
Back to back floods and the pandemic have financially crippled local bodies and many of them are depending on the gap fund from the state government to meet their daily expenses, he pointed out.
Further, the minister said that the revised permit fees have not adversely affected the construction sector. In 2022-23, 3,28,518 permits were issued by grama panchayats, which increased to 3,59,331 in 2023-24, showing a 9.37% rise.
“The total value of housing projects registered in 2023 amounted to `6,800 crore, which shows the hike in permit fee hasn’t affected the construction sector,” he said.
Blaming the Opposition for creating a negative campaign against the hikes, the minister said the Opposition raised the issue in the assembly only 14 months after the new property tax and permit fee came into effect.
He pointed out that many Congress-ruled local bodies initially passed resolutions refusing to implement the revised tax rates within their jurisdiction. “All of these local bodies are showing double standards by collecting the revised rates and utilising those funds,” he said.
He also pointed out that a 25% increase in property tax every five years is recommended by the Finance Commission.
“The new tax reforms were postponed again and again because of natural calamities and the pandemic and was finally implemented in 2023. To reduce the burden on taxpayers, the government introduced only a 5% annual increase over five years instead of a 25% one-time increase,” Rajesh said.