Ghaziabad civic body plans to revise property tax structure

The Ghaziabad municipal corporation plans changes to the property tax model linking it to revised rental values and property location

The Ghaziabad municipal corporation plans changes to the property tax model linking it to revised rental values and property location. Officials said the new model will see a 25% increase in tax revenue.

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This is the first time in 20 years that the civic body moved to revised the rental value. Residents may have to shell out three times the property tax that they are used to paying. Civic body officials say it would help in completing important projects.

Under the proposed structure, the corporation has categorised localities in 100 residential under three heads ‘A,’ ‘B’ and ‘C’ based on the rental vales, which will now be linked to the district magistrate’s circle rates. ‘A’ category localities comprise of prime localities and will have the highest rental value, while the category ‘C’ are least developed and will have least rental value.

Further, under each head, the location of the property on roads of varying width -- less than 12 m, between 12 m and 24 m and over 24 m -- will have a proportional impact on the tax. Previously, the corporation used to rely solely on this criterion for determining property tax.

At present, about 330,00 households pay the tax, which is charged annually based on the monthly rental value that ranges from 0.60p to ₹1.90 per square feet (psf) of the property.

“Under the proposed arrangement, the rental value will now range from 0.75p to ₹4 psf under the three categories,” said Sanjeev Kumar Sinha, corporation’s chief tax assessment officer.

House tax, of which property tax is 10%, brings in ₹125 crore.

“The proposed property tax structure is similar to the one in Lucknow. We estimate that the plan will bring in an additional 25% tax revenue,” said municipal commissioner M S Tanwar. “The rental values will be defined every two years.”

“The rates had been unchanged since 2001. We have invited the public to put forth their objections within 15 days (till February 20 at any of the body’ five zonal offices or headquarters). We will fine tune the proposal and implement it from the next financial year,” he said.

Some of the colonies which are categorised under category ‘A’ include blocks of Kavi Nagar, Raj Nagar, Nehru Nagar, Shastri Nagar, Neelam Vihar and Seemant Vihar in Kaushambi, sectors in Vasundhara and Vaishali, Shalimar Garden (main), Raj Nagar Extension besides Nyay Khand, Niti Khand, Abhay Khand, Shakti Khand and Gyan Khand in Indirapuram.

The rental value of properties on three different roads defined under category A is proposed to range from ₹1.25 to ₹4 psf, for category B from 90p to ₹3.5 psf and for category C from 0.75p to ₹3 psf.

Commercial and industrial taxes, which are linked to residential rates, will also be increased.

“The hike will affect the common man and basing the property tax on the circle rate is wrong. The circle rate is meant for sale/purchase of properties and not for tax. We will file objections and oppose the move. In order to increase revenue, the corporation must try to bring in households still left out of the ambit of house tax and also act against those yet to pay the tax,” said Raj Nagar councillor Rajendra Tyagi.

As per rules, the commissioner can decide on determining property tax. However, the councillors can object during House Meetings, although they may not be able to stop the reform.

Box: proposed property tax structure

The rental values for calculation of property tax will be defined on basis of circle rates released by the district magistrate

Colonies in 100 residential wards divided into three categories with different rental values based on their locations at different roads

Rental value for three categories of colonies will be defined on the basis of location on roads having width less than 12 metres; road with from 12 metres to 24 metres and those located on roads having width more than 24 metres

Old rental values of properties range from 0.60p per square feet to ₹1.9 per square feet

Category ‘A’ colonies are proposed to have rental value in range of ₹1.25 to ₹4 per square foot; category ‘B’ colonies in range of 0.90p to ₹3.5 and category ‘C’ colonies in range of 0.75p to ₹3 per square foot

Some of the colonies which are categorised under category ‘A’ include blocks of Kavi Nagar, Raj Nagar, Nehru Nagar, Shastri Nagar, Neelam Vihar and Seemant Vihar in Kaushambi, sectors in Vasundhara and Vaishali, Shalimar Garden (main), Raj Nagar Extension besides Nyay Khand, Niti Khand, Abhay Khand, Shakti Khand and Gyan Khand in Indirapuram