Mumbai: Property Tax Rates May Increase by Up To 14%

Mumbai: Property Tax Rates May Increase by Up To 14%

The Brihanmumbai Municipal Corporation (BMC) has announced that it will collect property taxes this year based on the most recent ready reckoner rates, indicating that property owners may end up paying higher taxes this year.

A proposal from the Assessment and Collection Department was placed before the BMC’s Standing Committee on June 16. If cleared, this proposal would come into force from April 1, 2021, until March 31, 2025. Officials said that this could bring an increase in the property tax rates by up to 14 per cent.   

Ready reckoner rates are put in place to help calculate market values of immovable property like land, including residential, commercial, and industrial. These factors are then used to determine the quantum of property taxes owed by an individual. 

Mumbai has approximately 4.2 lakh property owners, with 1.37 lakh of them having homes of up to 500 square feet in area. It’s important to note that officials last revised the property tax rates in 2015 for a period of five years.

Although the BMC was expected to revise the property tax rates in 2020, it held back its plans owing to the coronavirus pandemic. 

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The head of the Assessment and Collection Department, Dr Sangeeta Hasnale issued a clarification saying, “We are not imposing scheduled revision of property tax as the decision of Supreme Court is awaited. The only change will be inclusion of changed ready reckoner rates.” 

The BMC’s Standing Committee has said that it will require more time to approve the proposal as it needs to gauge this move’s impact on the taxpayers. 

When this proposal is approved, the revenue generated by property tax collections will increase by up to ₹1,000 crores for the 2021-22 year. This would consequently help improve the civic body’s revenue which has been falling since the pandemic hit last year. 

Officials from the BMC said that this move will not impact properties that have an area of up to 500 sq. meters while also granting some relief to hotels that are registered with the tourism ministry. Such hotels will receive industrial status which brings rebates for water, property, and development taxes in addition to sewerage and electricity charges.   

This new proposal has received criticism from the opposition leader in the BMC, Corporator Ravi Raja. “The BMC has postponed revision for one year and it should do so for 2021-22 as well. The government itself is talking about the third wave of Covid-19 and this change in tax will burden citizens. I have opposed the move.” he said.

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