Well Chintak,
With its revised set of rules for property tax collection for 2015-2020. The cash-rich BMC's current estimates for property tax are Rs 4400 crore approximately.
On the other hand, the weightage on hotels has increased, according to their grading. Schools, too, will be taxed according to residential rates and not commercial rates.
Absolutely right Bhaskar,
The civic authority has relieved the number of categories of property tax assesses to 5 from the earlier 21. All the residential properties in existence before March 31, 2015, with size of less than 500 sq-ft, will be levied property tax with a ceiling of 40%.
Yes Vikas, Once approved by the party group leaders in the BMC, the proposal will be put forth before the civic standing committee. Experts believe that the move of reducing the hike from (27 to 14)% comes with an eye on 2017 civic elections.
It means the property owners would have been burdened with much higher taxes in the absence of an approval for the revised structure. And the tax collection from residential properties is estimated to increase by 155 crore, or 11.7%, to 1475.22 crore.
@Bhaskar, The BMC will have to pay back the additional amount charged to citizens, who paid taxes between March 2010 and 2015, as per the built-up area. The administration, however, clarified the proposal will be in effect only from April 2015 and not since 2010. BMC expects 15% gain in tax collection.
@Rakshit, With the old structure which was based on built-up area, BMC is estimated to collect a total of 3984 crore for the fiscal year 2014-15. But as per the new tax structure, BMC was estimated to collect revenue of 5077 crore in next financial year of 2015-16, an increase of 1093 crore, while the revised rule will fetch 579 crore in property tax.
Right Padma, The move is expected to increase the property tax collection by 14.5% in 2015-16, against 27% estimated as per old rules.
Under section 128 of the Mumbai Municipal Corporation Act, the civic authority is required to approve a new tax only on or before the 21st day of March.
Hi all, At last the Brihanmumbai Municipal Corporation (BMC) has approved the revision in the structure of property tax for Mumbai. The standing committee of the municipal corporation, in a special meeting held on 19.03.2015, approved the revision in the base for calculation of property tax to carpet area from the current built-up space.
Hello Padma, As per the BMC the revision will be applicable for the next 5 yrs. with effect from April 1, 2015. The revision in property tax rules will help the civic authority collect revenue worth 4563 crore in 2015-16 (April-March).
Another changes in the rules is that the BMC has reduced the weightage accorded to the different types of constructions such as Reinforced Cement Concrete (RCC) buildings, luxurious RCC buildings and chawls. Concessions have also been proposed in the weightage given to the way in which the properties are used residential, commercial and industrial, among others.
Do you know Amreesh? In September 2014, with an increasing number of petitions filed in the Bombay High Court, which said that BMC was wrongly calculating property tax on the built-up area, the civic body had formed a committee to review the existing set of rules. The new set of rules is expected to come into effect from April 2015.
The only silver lining for citizens is that the hike would have been a lot more of up to 27% had the existing property tax rules been retained. This has been introduced after the BMC was condemn by the Bombay High Court over 17 ongoing petitions, which challenge the civic body's capital value-based property tax system.
The civic body had proposed a new formula for calculating tax, i.e. carpet area × Ready Reckoner Rate × 1.2% in July 2014. The proposal was, however, rejected by the standing committee members, who criticised the civic body for failing to assist the burden on property owners. The revised set of rules has proposed the formula as "carpet area*RRR".
Hi, According to the revised rules, the formula to calculate the capital value of a property, which determines the property tax, has been revised by changing some major factors. One of the changes will be that the capital value of the property will now be determined by taking into account the carpet area of your flat, instead of the built-up area.
Right Anirudh, This is because the BMC is expecting a 15% gain in property tax collection across the city, with its revised set of rules for property tax collection for 2015-2020.The cash-rich BMC’s current estimates for property tax are Rs 4400 crore approximately.