BMC ignores key factors in new property tax system
The Brihanmumbai Municipal Corporation (BMC) seemed to have juggled up the guidelines to calculate the new property tax system. The property tax under the capital value-based system has missed out on some key factors to compute the same.
The civic body has not taken into account several factors like leased and freehold land as well as multi-age and multi-type buildings, which affect the amount to be paid as property tax. Different factors have to be assigned to a building on account of age or type of construction while fixing a property’s capital value.
As per the current guidelines, the civic body has included factors like carpet area and the built-up area for each unit of a property, building’s age, type of the construction and so on. But it forgot to take into consideration the fact that a building could be multi-age or have multi-type construction.
Furthermore, the older section of a building would be a load-bearing structure while the new section could be reinforced cement concrete (RCC). As per norms, a load bearing structure is allowed 30% discount compared to an RCC structure.
In many instances, the civic body had added the whole building under a common age factor which has led to many miscalculations. They should have applied different age factors. Civic officials admitted that the guidelines for such structures are yet to be decided.
The civic body said that it has to finalise the guidelines to fix weightages for buildings with multiple-age and multiple-construction types.
However, a good news from the civic body is that around 81% of the properties in Mumbai remain unaffected from the recent hike in property tax. Also, with the new capital value-based property tax system in place, the citizens have been unhappy regarding the same and many plan to contest in High Court.
Further, for 27% of the residential properties in Mumbai, the tax bills have already been reduced as compared to the old rateable value-based system.
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