New Property tax system unfair to old buildings?

Tax

Tax (Photo credit: 401K)

From the Times of India 12.May.2012

MUMBAI: Despite the claims of the civic body on having transparency and parity in the new capital value-based property tax system, citizens seem unhappy at the development.

They feel that while a handful of new buildings that have come up after 2005 will benefit from the new system, several old structures will face a high rate of taxation.

According to BMC data, 27% or 3.87 lakh properties will benefit from tax reduction, whereas 19% or 2.75 lakh properties will face a higher rate of taxation, which will be up to two times the original amount paid. The maximum number of such structures are found in Andheri-Vile Parle west (50,000), Bandra-Khar-Santa Cruz west (34,000) and Esplanade-Fort-Colaba (11,000).

Anandini Thakoor, chairperson of the H-West Ward Welfare Association, said: “I understand that expenses have risen. But to shift the burden to citizens is not justified. Residents of some old buildings will have to face a 100% rise in tax. The tax slab should have been lower.”

Many felt that the approval to collect rent in retrospect was unjust. AGNI coordinator Raj Kumar Sharma said: “The state had to amend the present law to make it possible. The revised property tax should be levied from the time the revision is approved by the corporation.”

An official said there were legal provisions to charge people retrospectively. “From April 1, 2010, we had been sending people provisional or temporary bills. It was clearly mentioned in the bills that payment would have to be adjusted once the new system was approved. As it might be a steep amount for many, we are likely to extend the due date of payment of bills till March next year without any penalty,” he said.

What New Property Tax Format Means For You

A Borivli resident will stand to gain more-in terms of percentage-than a person living in Cuffe Parade under the new capital value-based property tax system. While there will be a 54% reduction in property tax in the former, the latter will see a 37% decrease.

In Cuffe Parade, tax levied under the old ratable value system was Rs 17.54 per sq ft per month. Taking into account the Ready Reckoner (RR) rate, which is Rs 34,330 per sq ft, the new property tax has gone down to Rs 11.10 per sq ft. In Borivli, the rate has gone down from Rs 4.99 to Rs 2.28.

Meanwhile, civic officials said of the 700 RR pockets in the city, only 17 had properties with a capital value more than Rs 2.5 lakh, pushing their taxation higher than the rest of the city. However, compared to the old system, the taxes have come down. Nepean Sea Road is one such example. With an RR rate of about Rs 53,120 per sq ft, the new property tax is pegged at Rs 17.17 per sq ft per month, 41% less than the earlier Rs 29.11

http://timesofindia.indiatimes.com/city/mumbai/New-system-unfair-to-old-buildings/articleshow/13103366.cms

 

  • NMMC to send ‘illegal’ stamped bills to unauthorised constructions(navimumbairealestate.org)

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