Property tax to go up by 20-25 pc from April

BBMP move comes after a gap of eight years

 Property owners in Bengaluru will have to brace up for a 20-25 per cent  increase in property tax with effect from April 1, 2016.

The State government has approved the Bruhat Bengaluru Mahanagara Palike’s (BBMP) proposal to hike the property tax after a gap of eight years.

Tax for residential properties will go up by 20 per cent and for commercial properties by 25 per cent. Chairperson of the Palike's Standing Committee on Taxation and Finance M Shivaraju on Thursday said the tax hike was mooted by the previous Administrator, T M Vijay Bhaskar, a few months ago. The hike will be notified in the State gazette soon. The Palike hopes to augment its revenue collection by Rs 700 crore once the revised taxes are mobilised.

Shivaraju said the hike is across the board but will not amount to 20 per cent as certain concessions are offered. “The hike is not 20 per cent per se. The BBMP offers five per cent rebate for those who pay tax before April 30 every year. Further, there is a concession in the form of depreciation cost,” he said.

The Self Assessment Scheme provides for concession of three per cent on the basic property tax as depreciation cost, which is directly proportional to the age of the property. Properties aged zero year (newly constructed ones) to three years are entitled for three per cent concession; properties aged between three and six years for six per cent concession; properties aged between six and nine years for nine pc concession and those aged between nine and 12 years for 12 pc concession.
Shivaraju said the BBMP is empowered to revise the taxes every three years but due to various reasons it was not done for the last eight years. “It is high time that the taxes are hiked as it is the primary source of the Palike's income.”

The tax hike proposal has not gone down well with the Opposition BJP. Senior BJP corporator Manjunath Raju said: “Before increasing the tax, the Palike should scrutinise commercial buildings which are paying very low tax. There are many revenue property holders who are outside the tax net or paying a paltry sum. If the government resorts to Akrama-Sakrama scheme, it will fetch at least Rs 78,000 crore as owners of revenue properties are more than willing to pay betterment charges and get the buildings regularised.”