From April 1, pay 11.74% more tax on your house | mumbai | Hindustan Times
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From April 1, pay 11.74% more tax on your house

mumbai Updated: Mar 20, 2015 00:47 IST
HT Correspondent
HT Correspondent
Hindustan Times
Mumbai news

Citizens will have to pay an average 14.52% more starting April 1, 2015. The Brihanmumbai Municipal Corporation’s (BMC) standing committee on Thursday cleared the proposal for a hike in property tax in the city.

Residential property owners will face an average increase of 11.74%, while industrial properties will attract a hike of around 29.47%.

Those who own flats that measure less than 500 sqft will also face a property tax hike because they have been shifted to the capital value system, according to the new rules.

For the past five years, though the capital value based system has been adopted to calculate property tax, small flat owners were exempt from it and had to pay property tax according to the rateable value. There are about eight lakh such owners and the BMC is expecting a revenue of Rs150 crore from them.

RB Arote, assessor and collector (Property Tax) said, “These properties were given an exemption by the state government for five years and were allowed to pay based on rateable value. These will be now be included in the capital value system and will have to pay according to the new rules passed by the standing committee on Thursday.”

The revised property tax rules will be adopted by the BMC from 2015 until 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.

The 2014-2015 revenue from property tax paid by residential property owners was around Rs1,320.21 crore, while the revenue estimate for the year 2015-2016 is around Rs1,475.22 crore.

In Thursday’s meeting, the Congress objected to charging more to the owners of smaller houses.

Congress corporator and standing committee member Asif Zakaria said, “The BMC could have easily given some benefit to the residential units by charging the commercial units more. They are also including small flat owners and are giving them no concessions. This policy needed to have a retrospective effect, starting 2010. Only then would it have helped the citizens.”

BMC sources, however, claimed these eight-lakh odd properties will have to be added to the system and will be billed according to the
new rules. One of the officials, on the condition of anonymity, said, “The last time the capital value system was revised, some flats that were included in the system benefited from it, as the tax was much lesser than what it was under the property’s rateable value. Similarly, out of the eight lakh flats that are going to be included this time, some might benefit from the system,” a BMC official said, on the condition of anonymity.