Property tax hike will not amount to 20%, says BBMP

The Bruhat Bengaluru Mahanagara Palike (BBMP) has increased the property tax by about 20% for residential properties and 25% for commercial ones with effect from April 1. As the increase is across the board and since the Palike offers certain concession, the hike will not amount to 20%.

“The hike is not 20% per se. The BBMP offers a 5% rebate to those who pay the tax before April 30 every year. Further, there is a concession in the form of depreciation cost,” a top BBMP official said.

The Self Assessment Scheme provides for concession of 3% on basic property tax as depreciation cost, which is directly proportional to the age of the property. Properties aged zero year (newly constructed ones) to 3 years are entitled to 3% concession; properties aged between 3 and 6 years 6% concession; properties aged between 6 and 9 years 9% concession and those aged between 9 and 12 years 12% concession.

The proposal to increase the property tax was sent to the State government for approval when T M Vijay Bhaskar was the BBMP administrator. The government approved the proposal in October 2015 and the BBMP council recorded the same on Saturday. The Palike hopes to augment its revenue by Rs 700 crore once the revised taxes are mobilised.

The BBMP has also reorganised the zones based on the 2015 land guidance value, for collection of property tax. Earlier, Bengaluru was divided into six zones on the basis of the 2007 guidance value. The reorganisation will push some areas from lower-end zones to higher and more developed zones.

Those owning properties in Whitefield, Mahadevapura, Bommanahalli, Hebbal, Outer Ring Road, Kanakapura Road and Bannerghatta Road will pay more tax in view of the reorganisation of zones. However, the new move will not have any impact on MG Road, Koramangala and Jayanagar, BBMP officials said.

The ruling party leader in the BBMP Council, R S Sathyanarayana, said that since tax zones had been revised, provisions had been made for owners of residential property to pay tax for the immediate upper zone in the event of the residential area placed in two or three upper zones.

The Palike has not revised property tax rates since 2001-02 when the Self-Assessment System was introduced, though it brought in unit area value system for calculation of tax and revised the zonal classification in 2008.
DH News Service