In the next financial year, those living in the island city will have to pay twice the property tax they currently pay.
But those in the suburbs will pay 70-75 per cent less than the current property tax.
Reason: The municipal corporation will begin calculating tax based on the capital value of the property.
The corporation is set to enforce the new property tax structure as the final hurdle was cleared on Wednesday when the civic general body approved the project.
“We will try to shift from the existing tax structure to the new one before March 2011. We may not be able to implement it 100 per cent in the first year itself, but we will try,” said Municipal Commissioner Swadheen Kshatriya. Chief Assessor and Collector N.A. Pathan said they aim to switch to the new system by October.
“The data required to switch to capital value system is still not in place,” he said.
The capital value system will apply the market rate of the property, as dictated by the Ready Reckoner, to calculate the property tax to be charged. It will also consider parameters such as the age of the property, nature of construction and use.
Currently, citizens are charged according to the rental values of their properties. That’s why most tenants in south Mumbai, where rents are low thanks to the Rent Control Act, pay meager tax as compared to those in the suburbs.
Under the new tax structure, commercial properties in the island city will have to pay three times more than the current tax and in the suburbs, property tax bills could see a rebate of up to 25 per cent.
For the first time, the corporation will impose property tax on slums in Mumbai.