BMC plans to increase property tax by 14%; panel doesn’t pass it

The Brihanmumbai Municipal Corporation (BMC) on Wednesday proposed to increase the property tax by 14%, in a proposal tabled before the civic standing committee

The Brihanmumbai Municipal Corporation (BMC) on Wednesday proposed to increase the property tax by 14%, in a proposal tabled before the civic standing committee. However, the proposal was not passed by the committee. The opposition said it needed more time to study the document and understand its financial burden on common man in the middle of a pandemic, which had led to a loss of many jobs or cuts in salaries, leader of Opposition and Congress corporator Ravi Raja said.

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The proposal tabled by the assessment and collection department on Wednesday proposed that hotels will get their status changed from commercial to industrial, bringing them relief in various taxes. It also proposed that property tax be calculated as per the ready reckoner rate as of April 1, 2021. With the revised ready reckoner rate, property tax on all properties will go up by approximately 14%. This will not affect the rebate given to properties below 500 sqft. When passed by the standing committee, this revision of rules will be applicable for a period of four years, from April 1, 2021 to March 31, 2025.

With this, BMC’s property tax income is expected to go up by ₹1,000 crore, Raja said.

As per the Mumbai Municipal Corporation Act, property tax is revised every five years. The revision can increase the property tax by upto 40%. The last revision in property tax was made in 2015, and the next one was due in 2020. However, due to the pandemic, the revision in 2020 was not done by BMC.

As per the proposal, however, the BMC will not revise the property tax rates for these four years, as scheduled by the MMC act, as there is a case pending in Supreme Court and outcome of the case could affect revision rules. The Standing Committee has kept the proposal pending citing that they will need more time to study its impact on citizens.

A senior civic officer from the property tax department said, “This proposal is not for increasing the property tax. We are not revising rates as planned every five years. However, we are taking into consideration, the changed ready reckoner rate, which can increase property tax on all properties upto some extent.”

The opposition criticised the proposal. Raja said, “With the change in status, hotels will get relief in property tax. However, this proposal will lead to increase in tax for common man. Even if the administration defends the decision by saying it is not revising property tax rates, as scheduled every five years, it should not take a decision that will burden common man. The Congress will oppose this proposal. We did not let it pass today, as we needed more time to study it.”