Kerala’s government has issued guidelines on green building incentives.

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

Buildings will be rated based on a variety of criteria, beginning with the selection of the land for construction and continuing through completion and, if necessary, demolition measures, in order to provide incentives such as building tax, stamp duty, and property tax breaks.

According to the order issued by the local self-government on February 25, buildings will be broadly classified into four categories: single family residential buildings of less than 200 square metres and greater than 200 square metres, apartment buildings, industrial buildings, and other category buildings. A green rating chart depicting the rating criteria and the points assigned to each criterion, as well as building grading (into grade A and grade B) will be prepared based on total points obtained. While ‘grade A’ buildings will receive the maximum incentives, ‘grade B’ buildings will receive 50% incentives.

In comparison to a conventional building, a ‘green building’ ensures optimal use of water and energy, conserves natural resources, generates less waste, and provides healthier spaces for occupants. Green buildings are expected to use less energy and water than conventional buildings and to eliminate construction and operational waste through recycling and reuse.

The rating will take into account factors such as site planning and construction management, water conservation and management provisions, solar energy utilisation, energy efficiency, waste management, occupant comfort and well-being, and the use of sustainable construction materials.

The reduction in the one-time building tax will only apply to new buildings that are under construction. All four-category buildings with a ‘grade A’ rating will receive a 50 percent reduction in one-time building tax, while buildings with a ‘grade B’ rating will receive a 25 percent reduction.

In terms of property tax, the reduction will apply to the sale of properties with green-rated buildings, subject to the current registration rules. This reduction will apply to both existing buildings and newly constructed buildings on the date of the order, but will be limited to the value of the building and not the entire property. During the transaction of a green-rated building, ‘grade A’ buildings will be entitled to a 1% stamp duty reduction, while ‘grade B’ buildings will be entitled to a 0.5 percent reduction.

On obtaining the Occupancy Certificate, the property owner will also be entitled to a two-year property tax rebate (OC). Existing building owners will also be eligible for a building tax rebate beginning on the date the building is certified as a green building by the empanelled consultants. While ‘grade A’ buildings would receive a 20% property tax rebate, ‘grade B’ buildings would receive a 10% rebate.

After two years, the owner will be required to submit a certificate of compliance in order to receive a further rebate. To ensure that the property tax rebate is reflected directly in the tax invoice, the respective LSGs will have to maintain a list of green buildings for which a tax rebate is given.