Residents of Delhi’s 1,650 unauthorised colonies will have to start paying property tax from next year — a move likely to bring Rs 300 crore in annual revenue to the cash-starved municipal corporations.
The order — passed by the Delhi government last month and likely to affect 50 lakh Delhiites — also authorises the three corporations to collect property tax from owners of vacant plots under their respective jurisdiction.
“We are levying the tax on the land. Had a government agency (building) occupied it, even they would have been liable to pay the tax. Therefore, even occupants of unauthorised colonies have to pay,” a senior corporation official told HT.
This, however, does not guarantee any additional facilities to the colonies. “The move should be seen as a measure of increasing our revenue. As the onus of paying property tax lies with the property owner, no additional cost would be incurred by the corporation,” another official said.
The AAP government order reverses a popular Sheila Dikshit-era notification – issued before the 2013 assembly elections — which barred corporations from collecting property tax until the colony’s layout plan was approved. “…the levy of property tax should be allowed from the date of approval of layout plan of that colony by MCD,” the notification had said. However, the latest order, a copy of which is with HT, allows corporations to collect the tax even if the building’s layout has not been approved.
The order, which comes into effect in April 2016, also allows collection of property tax from owners of vacant plots. “As per section 114 of the DMC Act, 1957, property taxes shall be levied on lands and buildings in Delhi. Therefore, even owners of unoccupied pieces of land in Delhi that come under the jurisdiction of the corporations are liable to pay taxes to the civic bodies,” an official said.
Sources said the tax would be levied based on the Unit Area Method.
As per municipal estimates, there are more than 50 lakh properties in Delhi, of which less than 25% pay property tax. The additional revenue would ease the chronic financial crunch at the three municipal corporations, two of which are facing workers’ strike over salary issues.