NDMC to implement new property tax regime in Lutyens’ Delhi

NDMC proposes a new unit-area property tax system for Lutyens’ Delhi, with possible 20–30% cuts; public feedback is open until October 23.

New Delhi: The New Delhi Municipal Council (NDMC) is set to implement a new property tax regime in Lutyens’ Delhi, releasing the New Delhi Municipal Council (Property Taxes) Bye-laws 2026 for public feedback.

NDMC to implement new property tax regime in Lutyens’ Delhi

Under the current system, the tax department calculates taxes based on a dual system involving estimate of rent value, property records and ground surveys, with people invited to review the assessment list and raise objections either online or in person in an annual cycle.

The rest of Delhi -- under the Municipal Corporation of Delhi (MCD) -- had moved to the more transparent Unit Area Method (UAM) in April 2004, and under the Jan Vishwas Act passed by Parliament in April earlier this year, the old method is expected to be phased out with the entire New Delhi area operating on UAM.

Officials said the new regime, in pursuance of the amended provisions of the New Delhi Municipal Council Act, 1994, will determine property tax based on factors such as the property’s usage, the age of the construction, the building’s structure, whether it is self-occupied or rented, and the availability of infrastructure in the area, with tax rates varying depending on the width of the road.

A Municipal Valuation Committee will be set up to recommend tax rates, slabs, base values and categorisation of colonies, with base unit area values for each category remaining in force for three years and multiplied by five factors -- use factor, age factor, structure factor, occupancy factor, and infrastructure and location factor, according to the document.

The MCD classifies colonies based on circle rates from A to H category with Category A colonies including Vasant Vihar and Shanti Niketan, Maharani Bagh while the lower categories comprising unauthorised colonies.

Streets will be classified as Category I (width of 24 metres and above), Category II (13.5 metres and above but less than 24 metres) and Category III (less than 13.5 metres), while buildings will be grouped into eight age categories from Group A (constructed prior to the 1960s) to Group H (constructed between 2020 and 2029).

Further, property tax will be payable either in a single lump sum or in four equated quarterly instalments due on June 30, September 30, December 31 and March 31, with a rebate of up to 15% for lump sum payment before June 30 and simple interest of 1.5% per month for late payments.

According to an NDMC official, the civic body currently has around 16,400 properties under its tax net, with approximately 10,500 taxpayers, including 1,600 government-owned properties. Officials said people can send their objections and suggestions to the property tax department by October 23.

The civic body has said the UAM may lead to a reduction of 20% to 30% in property tax, especially for old and self-occupied properties, as the tax will no longer be based on expected rental income -- which may vary among residents or establishments within the same colony -- but on a uniform unit area basis applicable equally to all.

A senior NDMC functionary said the objective is to simplify the tax system. “Any suggestions received regarding the draft will undergo internal deliberation. Following this, the draft will be revised based on these suggestions and presented to the Council for approval. Once approved, a notification will be issued. Upon receiving central government’s approval, a Municipal Valuation Committee (MVC) will be constituted to determine the categorization of colonies within the NDMC area, tax rates, and other relevant factors,” the official added.