Mumbai: In a major policy decision, the Maharashtra Cabinet chaired by the Chief Minister Mr Eknath Shinde on Thursday decided not to change the capital valued based property tax in Mumbai for 2022-23.
This decision has been taken with an eye on the upcoming BrihanMumbai Municipal Corporation (BMC) elections in a bid to give a relief to the property tax payers who are affected by the coronavirus pandemic. The government will amend the section 154 (1d) of the Mumbai Municipal Corporation Act, 1888. The property tax is a percentage of the capital value of the property. The BMC property tax is calculated using the Capital ValueSystem (CVS) which is based on the market value of the property.
Revenue loss to BMC
The BMC has decided to give a concession in the revision of the capital value for 2022-23. By giving this concession, the BMC will incur a revenue loss of Rs 1,116.90 crore.
‘’Due to the lockdown imposed because of COVID 19 and the fear of its spread, due to the many small businesses, educational institutes, development works, factories, mostly industrial areas were out of employment. This adversely affected the general economy. Therefore, most of the property owners, organizations, and public representatives had given representations to the BMC regarding waiving or giving concessions on property tax. Taking into account these representations, the cabinet today decided not to change the capital value based property tax in Mumbai for 2022-23,’’ said the urban development department officer.
Property tax remains one of the biggest revenue generators
Property tax remains one of the biggest revenue generators at an estimated Rs 7,000 crore for 2022-23, despite 100% waiver to owners of homes of up to 500 square feet. As per the BMC circular on property tax, the Maharashtra cabinet, on January 12, 2022, approved the state government’s decision to waive property tax on houses of up to 500 sq ft in Mumbai. Maharashtra chief minister Uddhav Thackeray, on January 1, 2022, announced a waiver of BMC property tax on residential units of up to 500 sq ft located within the Mumbai municipal area limits with immediate effect.
Today’s cabinet decision is crucial as the various stakeholders had expected the revision of about 10 to 18% in the property tax by BMC from the year 2022-23. The last revision was to take place in 2020 but it was notdone because of the COVID 19. BMC revises property tax every 5 years and the last revision based on capital value took place in 2015.
The BMC’s property tax collection increased by Rs 700 crore during 2021-22 at Rs 6,492 crore against Rs 5,792 crore in 2020-21 and Rs 5,094 crore in 2019-2020.
