Bengaluru corporations to acquire properties of habitual tax defaulters

Bengaluru: The city’s five municipal corporations have decided to take over properties of chronic tax defaulters as a last resort to prompt owners to clear their dues.

The decision, which comes ahead of the closure of the financial year, was taken after authorities found little success in auctioning defaulting properties during the public auction. This includes residential and commercial buildings.

In a press note, Greater Bengaluru Authority (GBA) Special Commissioner Munish Moudgil said the corporations have been advised to purchase defaulted properties as an exceptional case, after exhausting all prescribed recovery measures and when auctions fail repeatedly.

The GBA has instructed the corporations to give property owners multiple chances to clear their dues: first by issuing a demand notice, second by passing an attachment order, and finally through public auction. When these three steps are unsuccessful, the corporation is authorised to purchase the property at upset price.

"The property will be deemed sold to the city corporation at the pre-determined upset price linked to the guidance value. From the sale proceeds, all outstanding property tax dues, including penalties, interest, and administrative expenses, will be fully recovered. Any surplus amount will be refunded to the original khatedar (property owner) through a bank transfer, ensuring fairness and transparency," the press note read.

The property will vest with the city corporation free of encumbrances, and ownership records will be updated accordingly.

"Even at this stage, the defaulter is provided a final one-month window to clear all dues with applicable interest, upon which the takeover order will be withdrawn and the property restored," the GBA has stated.