BMC proposes 14% increase in property tax from April | mumbai | Hindustan Times
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BMC proposes 14% increase in property tax from April

mumbai Updated: Mar 17, 2015 00:43 IST
Mumbai news

Prepare to pay higher property tax bills from April 1, 2015. The Brihanmumbai Municipal Corporation (BMC) has proposed to increase the property tax by up to around 14%. This increase has been planned in the revised property tax rules that will be adopted by the BMC till 2019. The only solace for citizens is that the hike would have been a lot more (up to 27%) had the existing property tax rules been retained.

According to the revised rules, the formula to calculate the capital value of your property, which determines your property tax, has been revised by changing some major factors. One of the changes will be that the capital value of your property will now be determined by taking into account the carpet area of your flat, instead of the built-up area.

This has been introduced after the BMC was reprimanded by the Bombay high court over 17 ongoing petitions, which challenge the civic body’s capital value-based property tax system.

Another change in the rules is that the BMC has reduced the weightage accorded to the different types of constructions – Reinforced Cement Concrete (RCC) buildings, luxurious RCC buildings and chawls.

Concessions have also been proposed in the weightage given to the way in which the properties are used — residential, commercial and industrial, among others.

“These reductions have been planned taking into account the exorbitant hike in ready reckoner rates. We have nullified this hike by reducing the weightage given to other factors used to calculate the capital value of properties,” said a civic official.

According to civic officials, the hike would have been 27% had the existing property tax rules been retained.

They claimed the reduction in the weightage of the factors mentioned above has ensured the hike is not as severe as it could have been.

On the other hand, the weightage on hotels has increased, according to their grading.

Schools, too, will be taxed according to residential rates and not commercial rates.

Once approved by the party group leaders in the BMC, the proposal will be put forth before the civic standing committee. The move of reducing the hike from 27% to 14% comes with an eye on 2017 civic elections. While welcoming the proposal, the group leaders representing political parties in the civic body demanded that the amended formula be implemented with retrospective effect from 2010.

“While implementing the new formula in 2013, the BMC applied it with retrospective effect from 2010. Now that there are amendments made in the formula, it must be applied from 2010,” said Yashodhar Phanse, standing committee chairman and senior Shiv Sena leader.

The ruling Sena-BJP alliance in the BMC has agreed to clear the proposal in the next standing committee. “We have managed to save crores of taxpayers’ money by forcing the authorities to abide by the high court order. The BMC will have to pay back the additional amount charged to citizens, who paid taxes between March 2010 and 2015, as per the built-up area,” said Manoj Kotak, group leader in BMC.

Opposition leader Devendra Amberkar, too, welcomed the amendments. “It is a big relief to property owners. We welcome the changes made.”

The administration, however, clarified the proposal will be in effect only from April 2015 and not since 2010.

“We are now abiding by the high court order, which had asked us to calculate property tax on the basis of carpet area. We are expecting the proposal will be now cleared by the civic general body,” said RB Aarote, assessor and collector, BMC.