MP: Smart City residents will have to shell out more on property tax
If Indore is chosen for the Centre’s proposed smart city project, residents of city neighbourhoods selected for development will have to pay higher property tax and an additional “betterment charges”, an official said on Sunday.indore Updated: Dec 14, 2015 17:26 IST
If Indore is chosen for the Centre’s proposed smart city project, residents of city neighbourhoods selected for development will have to pay higher property tax and an additional “betterment charges”, an official said on Sunday.
Some charges would be levied to cover the operation and maintenance costs but there is no defined parameter on how much tax will be levied under the head of betterment charges, said Anup Goyal, project in-charge and executive engineer of Indore Municipal Corporation(IMC).
“Once the area is developed as per smart city guidelines, property rates in the area is bound to rise, so it is imperative on the civic body to levy betterment tax on the beneficiaries,” he said.
The property taxation in the city is distributed into five different rate zones depending on the annual rent value of the properties. Every ward in city has mix of more than one rate zone.
For instance, MG Road, Krishnapura, Shiv Vilas Palace, Khajuri Bazar and Rajwada Chowk in Rajwada area is put under rate zone – 1 while Bhoi Mohalla, Polo Ground, Sadar Bazar, Bakshi Bagh come under rate zone - 5 of the tax slab.
So if this area is developed as per the smart city guidelines, the entire area may be put under one rate zone or a separate property tax slab will be prepared for the smart city area for appropriation of property tax, said an IMC official, who asked not to be named.
According to the guidelines issued by the Union ministry of urban development for the smart city mission, cities will be evaluated more on their revenue-generation capacity and delivery mechanism rather than current infrastructure.
Apart from Rs 100 crore each from the Centre and the state governments, the IMC is banking on a self-financing model for generating more money for developing the area into smart city.
“We will go for public private partnership model for financing the entire project, wherein the corporation will provide government land and private partner will develop a mix of commercial, residential, amusement, parking complexes, and community centers,” said Goyal.
The corporation will also motivate private property owners to upgrade their properties on the lines of smart city, he added.
“The civic body will generate a significant amount of revenue from taxation in smart city area, which can be put to use for development of the rest of the city.”