Delhi: SDMC rolls back tax hikes for commercial properties

According to the proposal the tax rate hikes will now be rolled back, leading to a reduction of 20-50% in tax for properties such as guest houses, banquet halls, recreational clubs, and telecom towers, among others.

With just months left for the Delhi municipal polls, which are likely to be held early next year, the South Delhi Municipal Corporation has decided to reduce the property tax rates for several non-residential and commercial categories.

The property tax in the city is calculated based on six factors — the total covered area, the unit area values (per square metre (sqm)), age of the property, occupancy, structural factor and use factor. (Sonu Mehta/ HT Photo)

According to the proposal passed by the corporation’s standing committee on Tuesday, the tax rate hikes — these came into effect in July 2020 — will now be rolled back, leading to a reduction of 20-50% in tax for properties such as guest houses, banquet halls, recreational clubs, and telecom towers, among others.

According to the revision, the property tax for educational institutions, colleges and schools will now be calculated based on the fee structure of the establishment.

The property tax in the city is calculated based on six factors — the total covered area, the unit area values (per square metre (sqm)), age of the property, occupancy, structural factor and use factor.

Most of the changes have been made in use factor and occupancy factor, south civic body officials said. The tax rates in these categories were increased on July 27, 2020, through the implementation of the recommendations of the third Municipal Valuation Committee (MVC) report.

Col (retd) BK Oberoi, the standing committee chairman, SDMC, said changes will be reflected in eight categories. “The property taxes of schools and educational institutions will now be based on the tuition fee being charged by the institute. For schools charging a fee less than ₹600 per month, the use factor will be 1; for the ₹600-1,200 fee category, use factor will be 2; and for educational institutes charging ₹1,200 or more as monthly fee, the use factor will be 3,” he said.

A senior municipal corporation official said the biggest change will be for the properties where telecom towers have been installed as the use-factor for such properties has been brought down from 4 to 2. “For example, if property tax for such a property was ₹1,000, after the application of use factor 4, the owner had to pay ₹4,000. Now as per the use factor 2, the owner need only pay ₹2,000,” the official said, asking not to be named.