Pay property tax on capital value soon

Market rate of property will be taken into account
MUMBAI: The decks have been cleared for the state government to rationalise property tax in Mumbai and levy the charge on the basis of capital value rather than rateable value.
A joint select committee of the state legislature has almost reached a consensus to exempt properties smaller than 500 sq feet carpet from the capital value-based system for five years.
A final decision will be taken at the concluding meeting of the committee, slated for June 17. Thereafter, the urban development department will move a bill in both houses of the legislature to charge a capital value-based property tax. The bill is likely to be moved in the monsoon session, which starts in the second week of July.
Once both houses pass the amendment in the Bombay Municipal Corporation Act, 1888, the new tax structure will become applicable with immediate effect, fulfilling one of the conditions of the Jawaharlal Nehru National Urban Renewal Mission.
But rationalisation does not mean residents in the suburbs will immediately start paying lower property tax than those in the island city. That is because the increase in property tax for any property will be capped at 100 per cent of the existing amount for residential premises and 200 per cent for commercial premises.
Also, revisions in the property tax will only be carried out once in five years.
But there is some cheer for suburban residents. The lower limit for revision of the tax will be abolished. Thus, for certain properties, the tax could come down to as much as a fourth of what the owners are currently paying.
Surendra Gangan
Wednesday, June 04, 2008 03:06 IST
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