BMC's new property tax system to have limited impact

02 Feb 2011

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The new property tax system, to be introduced by the Mumbai Municipal Corporation, is expected to impact less than 15-20 per cent of the city's flat owners, given that most of the residential properties in the city measure less than 500 square feet, official sources said.

The new tax system will calculate property tax on the basis of capital value of the property as against the current system, which calculates property tax on the basis of the rent commanded by a property.

According to the data collected by the property tax department of the Brihanmumbai Municipal Corporation (BMC), over 70 per cent of the properties for which the BMC has data measure less than 500 sq feet in area. The civic body has digitised details of 2.27 lakh properties of the total 3.35 lakh properties in the city.

According to officials from the property tax department, a comprehensive study of data revealed that over 70 per cent of the total 2.27 lakh properties analysed measure less than 500 sq feet in area.

Under the BMC's digitisation process, the civic administration analysed details regarding 2.27 lakh properties for which data was available. Rent in South Mumbai is frozen due to the Rent Control Act, which allows owners there to pay low property tax while suburban properties shell out more tax due to high rents. With the new system, the gap is expected to be bridged and property tax payments balanced.

Meanwhile, the BMC, with a view to present an "honest" budget, would likely concentrate on the actual implementation of ongoing projects rather than announcing grandiose schemes that would take years to complete.

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