No hike on prop­erty tax for home less than 500 sq ft

Accommodation Times - - News -

State cab­i­net on 27th May pro­vided a great re­lief to home own­ers in the city, where they ap­proved a pro­posal to pro­tect own­ers of prop­er­ties less than 500 sq ft from any in­crease in prop­erty tax. Chief Min­is­ter Deven­dra Fad­navis, while an­nounc­ing the de­ci­sion said, “These prop­er­ties had been pro­tected from an in­crease till April 2015, af­ter which their taxes would have gone up man­i­fold. Wed­nes­day’s de­ci­sion will en­sure these smaller prop­er­ties re­main pro­tected for the next five years.” The prop­erty taxes of 16.89 lakh homes in the city will not be hiked for the next five years, with the state cab­i­net on Wed­nes­day ap­prov­ing a pro­posal to pro­tect own­ers of prop­er­ties less than 500 sq ft from any in­crease. “These prop­er­ties had been pro­tected from an in­crease till April 2015, af­ter which their taxes would have gone up man­i­fold. Wed­nes­day’s de­ci­sion will en­sure these smaller prop­er­ties re­main pro­tected for the next five years,” chief min­is­ter Deven­dra Fad­navis said. The move is ex­pected to pro­vide re­lief to over 16.89 lakh small home own­ers in the city. The civic body’s stand­ing com­mit­tee, where the Sena has ma­jor­ity, had ap­proved im­pos­ing the cap­i­tal value-based prop­erty tax sys­tem on smaller residential prop­er­ties, in­stead of the cur­rent sys­tem, where the tax is based on the prop­er­ties’ rental val­ues. The shift from the rental to cap­i­tal value-based sys­tem would have in­creased the prop­erty tax by up to 40%. While the BMC has not car­ried out a de­tailed study on the im­pact of such a de­ci­sion, the prop­erty tax paid by smaller houses in the is­land city would have gone up, as their rents are pal­try – dic­tated by the Ma­ha­rash­tra rent con­trol act, 1999. Though the de­ci­sion wil be ben­e­fited for many peo­ple, BMC will be af­fected by the move. As per the sources BMC will suf­fer losses of Rs.150 crore an­nu­ally.

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