Small flat owners may get property tax relief
Source: The Times of India
Mumbai: Small flat-owners across Mumbai could expect greater relief in their property tax assessments. All party MLAs on Tuesday proposed that no changes will be made in the tax structure for flats with an area up to 500 sq ft for an initial five-year period.
Put simply, lakhs of middle-class residents in chawls in the island city and those living in old buildings in suburban Mumbai could be spared any increase in the property tax which would shortly be levied on the basis of the market value of a property as against its rental value.
The proposal was discussed at the joint select committee meeting of the state legislature which met on Tuesday to seek an all-party consensus to shift to the capital value system of determining property tax while protecting the interests of the middle-class. At present, property tax is calculated on the basis of the rents determined in 1940.
Minister of state for urban development Rajesh Tope chaired the meet. While the MLAs unanimously agreed to the state government's proposal to determine property tax as per the ready reckoner rates, it was proposed that any increase should be restricted upto 1.5 times of the existing property tax in case of residential
premises and three times in case of commercial premises.
"In other words, if a resident of Dadar is presently paying Rs 100 as property tax, he will pay upto Rs 150 with the shift to capital value system. Similarly, in case of a commercial gala at Chembur, the owner who pays Rs 1,000 now will pay a maximum of Rs 3,000 after the rental value-based system is done away with. Though the property rates would be higher, we have proposed a cap on how much tax can be levied," a city MLA said.
For those renting their residential or commercial premises, the new capital value-based system of assessing property tax promises to be a boon. "Presently, the flat-owner has to pay 110% of the rent as property tax to the BMC. We have now proposed that property tax would now be levied on same formula which is 1.5 times of the existing tax in case of residential premises and three times of the existing tax in case of commercial premises," the MLA said.
Mumbai: Small flat-owners across Mumbai could expect greater relief in their property tax assessments. All party MLAs on Tuesday proposed that no changes will be made in the tax structure for flats with an area up to 500 sq ft for an initial five-year period.
Put simply, lakhs of middle-class residents in chawls in the island city and those living in old buildings in suburban Mumbai could be spared any increase in the property tax which would shortly be levied on the basis of the market value of a property as against its rental value.
The proposal was discussed at the joint select committee meeting of the state legislature which met on Tuesday to seek an all-party consensus to shift to the capital value system of determining property tax while protecting the interests of the middle-class. At present, property tax is calculated on the basis of the rents determined in 1940.
Minister of state for urban development Rajesh Tope chaired the meet. While the MLAs unanimously agreed to the state government's proposal to determine property tax as per the ready reckoner rates, it was proposed that any increase should be restricted upto 1.5 times of the existing property tax in case of residential
premises and three times in case of commercial premises.
"In other words, if a resident of Dadar is presently paying Rs 100 as property tax, he will pay upto Rs 150 with the shift to capital value system. Similarly, in case of a commercial gala at Chembur, the owner who pays Rs 1,000 now will pay a maximum of Rs 3,000 after the rental value-based system is done away with. Though the property rates would be higher, we have proposed a cap on how much tax can be levied," a city MLA said.
For those renting their residential or commercial premises, the new capital value-based system of assessing property tax promises to be a boon. "Presently, the flat-owner has to pay 110% of the rent as property tax to the BMC. We have now proposed that property tax would now be levied on same formula which is 1.5 times of the existing tax in case of residential premises and three times of the existing tax in case of commercial premises," the MLA said.
Property brokers and agents say that stabilisation in Pune's real estate market reflects the trend prevalent in the country's property segment. The country's economy is facing a slow-down and it is the same case with the construction sector as well.
ReplyDeleteRamesh Naik from Naik Navare Association, a property brokerage firm, explains that oversupply of property, especially in the residential segment is adding to this trend. "Most of the construction projects are in their initial phases. Hence, the property developers are in a hurry to sell their projects. The projects are priced comfortably. And the developers are luring home seekers with gifts and rebates. Some property developers are offering reduced Equated Monthly Installments (EMIs) and some are wavering parking fees for housing units," says Naik. He adds that many transactions are happening the actually figures are difficult to compute.
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