In what can come as a relief to 2.83 lakh property owners, BrihanMumbai Municipal Corporation (BMC) has proposed to defer the increase in property tax rates for one year owing to the pandemic. As per the rules, the civic body is supposed to increase the property tax rates every five years. Accordingly, the revision was due in March, 2020.
The proposal will be tabled before the civic standing committee and general body next week. The proposal would defer the process of increasing the property tax rates up to 40 per cent of the existing rates.
Mumbai has 4.2 lakh property owners. As per the property tax and assessment department, 1.37 lakh people, owing houses of area up to 500 square feet, are eligible for a complete property tax waiver.
BMC is yet to get a clarification from the state government over the complete waiver of property tax for houses up to 500 square feet. Last year, the state government had issued a notification on providing the waiver. However, the components of the taxes that could be waived stay undecided. With this move, the civic body is expected to get a set back of Rs 335 crore in revenues.
"BMC has not been sending bills to the owners of properties/flats admeasuring less than 500 square feet since the last one year. The decision is still pending. It needs to be discussed with public representatives in the general body and standing committee," said Ravi Raja, Congress corporator and leader of the opposition in the BMC.
The last revision in property tax rates was implemented in 2015 for a period of five years. The fresh revision was scheduled for 2020-2025 and was to come into effect starting March 2020.
Sangeeta Hasnale said, “Yes, it is true that there is a proposal to defer the increase in the property tax rate for a year. However, it is yet to be approved."
For the corporation, property tax becomes the biggest income source (24 per cent) for the civic body after the Octroi was abolished. BMC has failed to achieve its target since the financial year 2016 to 2017. It had set a target of Rs 6,788.58 crore for property tax collection for 2020 to 2021. However, with the prevailing situation, it seems that the civic body might fail to meet its target yet again.