Mira-Bhayandar: MBMC To Levy More Taxes On Rented Commercial Properties, Notices Issued

Mira-Bhayandar: In an effort to bolster revenue generation, the Mira Bhayandar Municipal Corporation (MBMC) has finally resolved to impose additional taxes on commercial properties that have been leased out by their original owners. Despite the general body passing a resolution to this effect back in February 2018, the tax department had failed to implement it for over five years.

In accordance with the resolution passed by the general body, following rule 7 in chapter VIII (taxation rules) of the Maharashtra Municipal Corporations Act-1949, non-residential properties that have been leased out will now attract a tax of either 20 percent of the annual rent based on the capital value-based tax system or ₹10 per square foot of the carpet area, whichever is higher.

Tax department issuing notices

The tax department has commenced issuing notices to property owners, instructing them to provide copies of the leave-and-license agreements for the commercial properties they have leased to lessees, within seven days. The assessed number of properties in the twin city is currently estimated at around 400,607, comprising 64,618 commercial units and 335,989 residential units.

Notably, the tax department lacks information about the exact count of commercial properties being used on a rental basis. "We have requested property data from the power service provider and the sub-registrar, which will help us differentiate between self-occupied and rented properties," explained Chandrakant Borse, the tax-in-charge.

Property tax collections

Projected property tax collections for the ongoing fiscal year stand at ₹280 crore, making up a significant portion of MBMC's revenue. However, this move to impose additional taxes is likely to increase the projected figures by a few crores, as numerous properties including industrial units, multiplexes, shopping complexes, and individual shops will now fall under the rental tax category.

The MBMC faces a formidable challenge in increasing its property tax revenue receipts by at least 25 percent to remain eligible for central government grants designated for various projects and initiatives under the fifteenth finance commission's purview.