Get ready to pay higher property tax this Dec
Following the state government’s notification, the Brihanmumbai Municipal Corporation will soon begin charging property tax on the capital value of the property, as it appears in the Ready Reckoner, and not the rent.mumbai Updated: Aug 28, 2010 01:44 IST
Come December and those living in south Mumbai will pay higher property tax than those living in the suburbs.
Following the state government’s notification, the Brihanmumbai Municipal Corporation will soon begin charging property tax on the capital value of the property, as it appears in the Ready Reckoner, and not the rent.
Since property in the island city is costlier than that in the suburbs, residents of the island city will have to pay higher tax with retrospective effect from April 2010.
“Property owners will get the current bill, calculated according to the old system, in the first week of September and the next bill will be sent with the correction [as per the new system],” Municipal Commissioner Swadheen Kshatriya said on Friday.
“The difference between the old and new rates will be adjusted in the next bill, for the period between October and March. It will reach property owners in December.”
Those living in the island city will have to pay up to 100 per cent more if their house is larger than 500 square feet while those living in the suburbs will end up paying much lesser, about 15-20 per cent.
Citizens are charged property tax according to the rental values of their property.
As a result, most properties in south Mumbai, where rents are low because of the Rent Control Act, end up paying very little as tax compared to the suburbs.
The capital value system uses the market value of the property to calculate tax.
It also considers parameters such as the age of the structure, nature of construction and usage, and locality. Residential properties in the island city measuring up to 500 sq ft will be exempt from the new tax structure for the first five years after it is effective.
“The purpose is to rationalise the property tax system,” Kshatriya said.
“Revenue is one of the factors but we will see that it is neutral.” There are at least 3.5 lakh properties in Mumbai. The municipal corporation has details on the area of only 1.8 lakh properties.
The corporation has appointed a private agency to survey all properties and compiled the data.