Mumbai: After three years of keeping in abeyance the revision in property tax, the BMC has finally kicked off the process to review the existing slabs. As a first step, the civic body will appoint a chartered accountancy firm to study and advise on the revision. Officials said that the current tax might increase by 15% for 2023-25. However, the new rule will not impact houses up to 500sqft.
Property tax revised every 5 years
As per the BMC Act, property tax is revised every five years. The last revision was in 2015 and due in 2020 but postponed owing to the Covid-19 pandemic. In March this year, the Supreme Court rejected a review petition filed by the BMC challenging a high court order in 2019 that set aside certain rules framed for retrospective tax assessment.
As per the SC’s direction, the BMC has to frame new rules and issue fresh bills to taxpayers. This complication delayed the property tax bills being sent to owners. The civic authorities have now started the process of revising the rates in force from April 1, 2023, to March 31, 2025.
Accordingly, a tender was invited on Tuesday to appoint a chartered accountant to study and advise the sectors in which tax can be increased based on ready reckoner (RR) rates. The RR rate is the minimum value of property set by the government. It helps calculate the true market value of immovable properties – be it land, residential, commercial and industrial.
“According to the Act, the BMC can increase property tax by up to 40%, but we don’t want it to be a burden on taxpayers. The rates will therefore rise by 10-15% for the next two years,” said a senior civic official. However, additional municipal commissioner (projects) P Velrasu denied the development.
The BMC collected Rs5,638 crore as property tax for 2022-23, while it recovered Rs5,792 crore in 2021-22. The BMC has set a target to collect Rs6,000 crore in 2023-24.
Pointers:
Total properties 4.2 lakh
Residential 1.37 lakh
Commercial 65,000
Industrial 6,000
