BMC plans to increase property tax rates by 14%
Real Estate

BMC plans to increase property tax rates by 14%

The Brihanmumbai Municipal Corporation (BMC) has planned to increase property tax rates in Mumbai by 14% based on the new Ready Reckoner (RR) rate.

But the proposal is anticipated to face strong opposition as municipal elections are just a few months away. On Wednesday, the civic standing committee delayed discussion on the proposal until next week.

The current property tax rates are estimated on the RR rates of 2015. But the BMC wants to revise the calculations based on the much higher current RR rates.

The revision in property tax rates last took place in 2015, said the BMC officials. As per the amendment in the Mumbai Municipal Corporation (MMC) Act, the revision in property tax rates is conducted once every five years, and this is normally done at the end of the fifth year. The current revision was scheduled for 2020-2025.

The BMC has decided not to increase tax rates, but officials stated that if the tax is estimated on the new RR rates, it will result in a rise in property tax for residents.

The BMC has also planned to allow restaurants and hotels to pay property tax as industrial units rather than commercial units. Officials stated it would help hotels and restaurants as property tax rates for industrial units are less than commercial units.

In a relief to lakhs of residents, the BMC had offered a total waiver in a rise in property tax rates last year. BMC officials stated if the rates were revised as scheduled in 2020, residents would have faced an increase of up to 40%. As per the BMC officials, there are 4.2 lakh, property owners, in Mumbai, out of which 1.4 lakh have houses that are less than 500 sq ft, and they are eligible for a property tax waiver.

An official explained that property tax is estimated on the capital value of a property based on RR rates. The RR rate is multiplied by several factors like floor rise, nature of construction, a year of construction, carpet area of the property, ward in which it is placed to determine the capital value of the property, among others.

Image Source

Also read: Maha property registrations & revenue drops by 60% due to Covid-19 curbs

Also read: How housing sales saw a boost among stamp duty reduction and how luxury deals took the leap

Related Stories

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 86575 81178