Hike in Property Tax for Commercial Establishments
Enhancement of property tax has been on the cards of the municipal corporation for the past four years after formation of Greater Hyderabad. Since March was the financial year ending for the 2010-11, the municipal corporation has decided to hike property tax from the 2011-12 financial year. Two proposals were sent to the government separately. One was to increase property tax for residential properties and another was to enhance tax on commercial properties. In March, the corporation permitted lifting the cap on hike.
Nearly four lakh non-residential (commercial) properties in the Greater Hyderabad Municipal Corporation (GHMC) limits will have to pay more property tax from this financial year. While 81,577 commercial properties are located in the erstwhile Municipal Corporation of Hyderabad (core area), another three lakh are in the 11 surrounding municipal circles.
“With the increase of tax for commercial properties, the corporation may get additional revenue of Rs 250 crore. In the core area alone, the hike in property tax may fetch about Rs 115 crore,” a senior GHMC official told TOI. The Municipal Administration and Urban Development (MA&UD) department had issued GO (MS No 88) in March, 2011 removing the cap on enhancement of property tax for commercial properties. The rules 9, 10 and 11 of the Hyderabad Municipal Corporation (assessment of property tax) Rules, 1990, restricted the revision of property tax to 75% in respect of residential buildings and 100 and 150% on the current tax on non-residential buildings of above 25 years old and less than 25 years respectively.
The GHMC has already enhanced property tax in the core city circles like Khairatabad, Abids, Secunderabad and started serving demand notices for the current financial year, while deputy municipal commissioners of surrounding circles have been asked to identify non-residential properties.
An extensive survey was also conducted on properties of various categories and areas in 2007 and proposed new tax system, where tax would be fixed based on area, type of construction and usage. Notifications were also issued to increase the existing property tax. In view of municipal corporation elections, the state government had permitted to enhance only 50% on existing tax of commercial buildings and did not allow hike in residential properties. Again in February 2010, the corporation sought permission of the government to increase tax after the corporation elections.
Times of India
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