Mumbai property tax rises by 15% on average; flats under 500 sq ft remain exempt

Mumbai property tax update: The Mumbai Civic Body has increased the slab of property tax owing to an increase in the ready reckoner rate from FY26

The Mumbai Civic body, also known as the Brihanmumbai Municipal Corporation (BMC), has restructured property tax in the Mumbai real estate market by an average of almost 16%, according to a statement issued by the corporation.

The Mumbai Civic body, also known as the Brihanmumbai Municipal Corporation (BMC), has restructured property tax in the Mumbai real estate market by an average of almost 16%. (Picture for representational purposes only) (Pixabay)

According to BMC, there has been no amendment or increase in the structure or rate of property tax. However, due to ready reckoner rates in Mumbai increasing from FY26, the property tax automatically stands to be increased, owing to the base of capital value going upwards.

To cite an example, if the annual property tax for a flat owner was ₹50,000, it would now be above ₹57,500.

The Brihanmumbai Municipal Corporation (BMC) has increased property tax for the first time in nearly a decade. The last revision took place in 2015, but the scheduled hike in 2020 was deferred due to the COVID-19 pandemic. Under Section 154 (1C) of the Mumbai Municipal Corporation Act, 1888, the capital value of properties must be revised every five years, which typically leads to an increase in property tax.

Flats below 500 sq ft remain exempt

According to the BMC, flats smaller than 500 sq ft have been exempted from property tax since 2022, and the decision taken earlier remains as it is. Hence, the BMC clarified that there is zero levy on these flats.

There are 4,00,000 housing societies in Mumbai. BMC individually issues property tax bills to flat owners. The Maharashtra government announced in 2022 that it would waive property tax for flats below 500 sq ft, a move that it said would help citizens save ₹460 crore annually.

Garbage fee collection deferred

The BMC announced on May 29 in a statement that it has deferred its much-debated fee on solid waste management, or garbage tax, in view of the increase in property tax.

According to the BMC, the user fee was meant to cover the daily collection of solid waste from individual homes as well as commercial and industrial establishments. The levy was proposed in April; the fee ranges from ₹100 to ₹7,500, depending on the size and nature of the establishment.

However, in view of the increase in property tax, Maharashtra Chief Minister Devendra Fadnavis and Deputy Chief Minister Eknath Shinde decided to defer the levy of the garbage fee.