Real Estate

Mumbai builders oppose value based property tax system

Our Bureau Mumbai | Updated on March 12, 2018

The new system provides a commutation formula that is based on the capital value of the property as against the earlier system of going by the rental values. — Photo: Paul Noronha   -  Business Line

Opposing the new property tax structure of the Brihanmumbai Municipal Corporation, real estate developers here extended their support to consumer associations protesting against the tax system.

The new system provides a commutation formula that is based on the capital value of the property as against the earlier system of going by the rental values.

Over 35,000 housing societies and a number of non-Governmental organisations have planned a one-day hunger strike opposing the new tax system computed on capital values.

Paras Gundecha, President, Maharashtra Chamber of Housing Industry, said the new property tax formula is against consumer interest, especially at a time when the common man was already burdened with the series of taxes such as stamp duty and value added tax.

“As inflation is taking a toll on everyone, the consumer is under tremendous pressure due to job loss, economic slowdown and taxes. It is high time the Government brings greater clarity in the calculation method it uses for these taxes and reduce the burden on consumers,” he said.

The new corporation rules state that the total built-up area of a property will include areas such as terraces, mezzanine floor, basement, stilt, porch, podium, service floor, entrance lobby, lounge, air-conditioning plant room, air handling room, up to watchman cabin (proportioned accordingly for a flat).

The tax based on capital value will give weightage given to tenancy, age of building, type of structure and open spaces.

The base value will be arrived at by using the ready reckoner rate (guideline value). There have been reports that interpretation of the rules had led to flaws in the computation of tax, which in any case is higher since it is based on capital value of property.

>shanker.s@thehindu.co.in

Published on March 13, 2013

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