BMC to auction 228 properties defaulting on ₹581-cr property tax

For the first time in 15 years, the Brihanmumbai Municipal Corporation (BMC) is set to auction 228 properties whose owners have defaulted on paying property tax amounting to over ₹581 crore.

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Civic officials said defaulters can still clear their dues, until the properties have not been auctioned.

BMC is currently in the process of attaching these properties and has started the process of auctioning in some cases.

Sangeeta Hasnale, assistant municipal commissioner (assessment and collection department), BMC, said, “These properties have not paid their dues for years despite several reminders. We have proceeded with the attachment of the properties and they will be auctioned too.”

The defaulters include commercial, residential and educational establishments, small-scale industries, government-owned properties and open plots.

Of the 228 properties, 78 are situated in the island city, 90 in the western suburbs and 60 in the eastern suburbs.

Property tax is the biggest source of revenue for the civic body. The civic body collects ₹5,000 crore every year as revenue from property tax from four lakh property owners.

The civic body has not auctioned any properties defaulting on taxes since 2005. The move comes against the backdrop of the dip in BMC’s property tax collection in till December 2019. BMC has collected nearly ₹1,700 crore as revenue from property tax till December 2019, which is ₹900 crore lesser than the ₹2,400 crore earned during the same period in 2018.

DM Sukhtankar, a former municipal commissioner, said, “What alternative does BMC have other than auctioning the properties? BMC is criticised if the arrears mount up, which also reflects on the working and recovery mechanism of the civic body. BMC is also criticised for auctioning the properties to recover unpaid taxes. Auctioning the properties is a good move after other recovery mechanisms have had no positive results.”

Civic officials have attributed the dip in collection to the lack of clarity in property tax exemption for flats with less than 500-square feet area. “The software generating the bills has not been updated owing to lack of clarity on excluding the flats having less than 500-square feet area. However, we have issued bills to flats that have an area of more than 500 square feet.”

According to the rules, a tax- payer has to pay property tax within 90 days of receiving the receipt.

Those who fail to pay have to face action in phases, which involves disconnection of water supply, electricity and so on.

They are given another 21 days to clear their dues, failing which the process for attaching the property or some similar action can be initiated.