BMC Clears Proposal To Raise Property Tax Exemption Limit To 700 Sq Ft

Mumbai: After exempting properties up to 500 sq ft, the Brihanmumbai Municipal Corporation's General Body meeting recently passed a motion to raise the exemption to 700 sq ft. A similar BJP proposal in 2018 went undecided, but this time, with no objections from the ruling BJP–Mahayuti alliance, Mayor Ritu Tawde approved it. The motion now heads to the BMC administration for final approval, potentially costing the civic body Rs. 700 crore in revenue if implemented.

Political Push Revived

As per the state government directions residential flats measuring up to 500 sq. ft. have been exempt from property tax since 2022, and that decision remains unchanged. Four years after the BMC elections and the formation of the elected body, the proposal has resurfaced—this time raised by Shiv Sena (UBT). Senior corporator Yashodhar Phanse stated that rising financial pressures are forcing many families to sell their homes and move out of Mumbai. He has proposed increasing the property tax exemption limit from 500 sq. ft. to 700 sq. ft. to provide greater relief to residents. It was also included in the manifesto of Shiv Sena (UBT) for the 2026 civic elections.

2018 Proposal Recalled

In 2018, similar proposal was moved by BJP leader Manoj Kotak and was passed in the civic house. Another notice of motion—granting a 60% concession in property tax to owners of houses measuring between 500 and 700 square feet—was also approved in the civic house and forwarded to the state government for further approval. However, no decision has been taken on this proposal to date, said civic sources. The proposal recently passed in the civic house will also require an approval from the state government's Urban Development department.

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Revenue Impact Concerns

Property tax is the second-highest source of revenue for the BMC. The civic body has experienced a decline in collections due to the exemption granted to residential properties up to 500 sq. ft. and the absence of any tax hike over the past five years, resulting in an estimated annual loss of Rs. 400 crore. If the exemption limit is further extended to 700 sq. ft., an additional Rs. 300 crore would be forfeited, taking the total annual revenue loss to approximately Rs. 700 crore. Currently, around 14.98 lakh properties fall within the 500 sq. ft. exemption bracket, with an additional 2 lakh units covered if the limit is increased to 700 sq. ft.

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