Have a big flat in an old SoBo building? You'll pay more tax
BMC says it rationalises taxes levied, activists say it favours builders.mumbai Updated: May 11, 2012 02:05 IST
The new property tax system will spare residential properties with carpet area of less than 500 sq ft. This will be a relief to many residents living in the island city, where the property tax is set to rise.
Three years after it was proposed, the civic standing committee on Thursday decided to enforce the new property tax system, which is based on the capital value of properties. So far, property tax was calculated on the basis of the rent a property commands.
Put simply, properties with high market value will now be charged higher. This decision will most affect old properties in the island city where rent had been frozen under the Rent Control Act.
With the new rates being calculated on the basis of the market value of the property, in the island city, residences would be paying up to two times more while for commercial units it would be up to three times more.
Rajiv Jalota, additional municipal commissioner, said: "The increase in taxes for residents of old buildings in south Mumbai will be marginal. They were paying substantially lesser than residents of new buildings. The system will rationalise taxes levied in the city."
The civic body said the new system will bring transparency as you will be able to assess your own tax. The capital value of residential and commercial units will be put up on the BMC's website. The rates will get revised every five years, but won't exceed 40%.
The system could affect those in new redevelopment projects as these will attract higher tax. "The rules have been framed to protect the interests of builders. Tax will increase because under the new system, common area such as security cabins, gardens, jogging tracks, water tanks, etc., will be taxed," said Rajkumar Sharma, citizen activist.
Experts said new commercial properties in the island city would be the worst hit. "The disparity that existed has been reversed in favour of the suburbs," said Rajendra Mehta, president of Lessors Association.
First Published: May 11, 2012 02:03 IST