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Your property tax could increase

mumbai Updated: Dec 15, 2010 02:09 IST
Kunal Purohit
Kunal Purohit
Hindustan Times
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You could end up paying more property tax than you had expected to.

The three-member committee, appointed by the civic body to ensure the new capital value-based property tax system is implemented smoothly, has rejected most of the objections citizens raised, civic sources told the Hindustan Times on Tuesday.

The committee, comprising retired bureaucrat DN Chaudhary, former chief secretary DM Sukhtankar and architect Roshan Nanavati, will officially present this report to the Brihanmumbai Municipal Corporation (BMC) commissioner on Wednesday.

The capital value-based system will replace the system of calculating property tax based on the rent a property commands. Rents for old buildings in south Mumbai were frozen at rates that existed in the 1940s. The property tax residents of these buildings paid was meagre compared to what suburban residents paid for smaller houses.

The Hindustan Times had reported on December 1 that the BMC had received 215 objections to the proposed system from citizens. These objections were forwarded to the committee.

A civic official, requesting anonymity because he is not authorised to speak to the media, said 90% of the objections were regarding calculating of the capital value of the property on the basis of its built-up area.

This will mean that the BMC will take into account the carpet area (wall-to-wall) area of your flat plus common areas such as the walls and passages while calculating property tax, thus increasing it.

Citizens felt the carpet area of a flat should be the base for calculating its capital value.

A member of the committee, requesting anonymity because the report is yet to be presented to the BMC, said: “It is not possible to calculate the capital value of property on the basis of the carpet area since the Ready Reckoner rates refer to the built-up area of a property and not carpet area. How can we go against the Ready Reckoner?”

Citizens had also objected to the Ready Reckoner rates being taken as the basis for calculating property tax. “There is a litigation pending against the credibility of property rates mentioned in the Ready Reckoner,” Chembur-based activist Rajkumar Sharma said. “How can the BMC then make that the basis of its calculation of property taxes?”

Another member of the committee, who also did not wish to be identified, said the objection to Ready Reckoner rates was not a valid one.

“These rates are lower than the market value of the property and the tax payable will be less if these rates are considered,” he said.

Sharma said citizens will continue to oppose the system.