The much-debated new property tax regime recently passed by the civic body has now come under the scanner of the Bombay high court.
Political activist Rajendra Phanse has moved court, challenging the capital value-based regime and contending that it is uneven. He has also sought implementation of property tax reforms mandated by the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
“The present property tax hike is unequal and is meting out injustice to certain property-owners in the city,” states the petition, filed by the 54-year-old Phanse, general secretary of Thane-based political party Darmarajya Paksha, through advocate VP Patil.
Under the new tax regime, owners of properties in old buildings and in prime areas will end up paying a significantly higher tax. Taxes on commercial properties will also be up to three times higher.
According to Phanse’s PIL, owners of commercial properties in uptown areas such as Cuffe Parade, Nariman Point and Napean Sea Road, as well as new business centres such as Worli, Lower Parel, Bandra and Andheri, will end up paying property tax that is 25% higher than prevailing rates in cities such as neighbouring Navi Mumbai.
According to the new regime, residential properties with carpet area of 500 sq ft or less would be exempted from tariff rise. However, properties in old residential buildings with carpet area of 500 sq feet or more would be charged up to two times their current tax rates.
The PIL contends that this hike is uneven, as around 7.4 lakh properties with areas admeasuring 500 square feet or less would be completely exempt from the hike and 2.75 lakh owners of properties with area admeasuring more than 500 square feet will have to pay more.
The petitioner has also sought directions to the civic body to implement tax reforms mandated by JNNURM, saying that though the civic body has been receiving financial aid from the state as well as the central government under the scheme, it has neglected implementation of tax reforms stipulated under it.
The scheme, aimed at encouraging reforms in civic administration and fast tracking planned development of identified cities has been introduced by the central government in 2005 and though it has reached the fag end – it will complete its seven-year mission period in December 2012 — the civic body has not bothered to adopt property tax reforms, the PIL argues.
The PIL has been posted for hearing on June 16.