Kerala govt issues guidelines on incentives for green buildings

The Kerala government has issued detailed guidelines announcing various incentives to the “green” rated buildings in the state as part of encouraging eco-friendly buildings.

The buildings will be rated on multiple criteria from the choosing of the land for construction till the completion and measures put in force for demolition if required, to offer incentives including discounts in building tax, stamp duty and property tax.

As per the order issued by the local self-government on February 25, the buildings will be broadly classified into four categories –– single family residential buildings below 200 square metre and above 200 square metre, apartment buildings, industrial buildings and other category buildings. A green rating chart depicting the rating criteria and the points assigned against each criterion, grading of buildings (into grade A and grade B) will be prepared on the basis of total points obtained. While ‘grade A’ buildings will get the maximum incentives, ‘grade B’ buildings will be entitled to 50% incentives.

A ‘green building’ means the one which ensures optimum utilization of water and energy, conserves natural resources, generates less waste and provides healthier spaces for occupants, as compared to a conventional building. The green buildings is expected to reduce the energy and water consumption to less than half of conventional buildings and eliminate construction and operational waste through recycling and reuse.

The factors that will be considered for the rating will include the site planning and construction management, provisions under water conservation and management, solar energy utilization, energy efficiency, waste management, occupant comfort and well-being and use of sustainable construction materials.

The reduction in the one-time building tax will be applicable only to the new buildings that are coming up. A reduction of 50% in one time building tax will be given to all the four category buildings, coming under ‘grade A’ rating while it will be 25% for buildings under ‘grade B’.

With regards to property tax, the reduction will apply to the sale of properties with green rated buildings, subject to the registration rules in force. This reduction will be applicable to buildings that are already existing on the date of the order as well as the newly constructed buildings but will be restricted to the value of the building and not to the entire property. During the transaction of a green rated building, ‘grade A’ buildings will be entitled to reduction of 1% stamp duty whereas 0.5% reduction will be applicable for ‘grade B’ buildings.

The owner of the property will also be entitled to a property tax rebate for a period of two years on securing the occupancy certificate (OC). The owners of the existing buildings will also be eligible for building tax rebate from the date of certification of the building as green building by the empanelled consultants. While ‘grade A’ buildings would get a rebate of 20% in property tax, ‘grade B’ buildings would get a rebate of 10%.

After two years, the owner will have to submit a certificate of compliance for availing further rebate. The respective LSGs will have to maintain the list of green buildings for which tax rebate is given, to ensure that the property tax rebate is reflected directly into the tax invoice.