BMC proposes 14 per cent hike in property tax this year

The new rate will be based on the ready reckoner rate of each area. Representation pic

After waiting for a year, the BMC on Thursday proposed a revision of property tax based on the ready reckoner rate of each area. While the rise won't be uniform, the average hike would be around 14 per cent. Corporators, shopkeepers and restaurant owners have opposed the plan citing the pandemic.

Property tax is the largest source of income for the BMC following compensation in lieu of octroi.

As per the BMC Act, property tax is revised every five years. The last revision took place in 2015 and 2020's revision was postponed for a year at the state level.
"The administration was ready with the revision but the decision was postponed due to the pandemic and total lockdown," said a BMC officer. The officer added, "The revised tax depends on the ready reckoner rate which is dependent on various factors."

"Amid the Covid-19 pandemic, the ruling Shiv Sena gave a 50 per cent rebate in premium to developers, 50 per cent rebate on security deposits to contractors and property tax exemption to hotel owners in the name of economic downturn. They did not give any property tax exemption to common people," said Bhalchandra Shirsat, BJP corporator.

Reduction for hoteliers

"The administration proposed to classify hoteliers in the industrial category instead of the commercial one. The industrial property tax is around 25 per cent more than the residential property tax, while commercial property tax is 100-200 per cent more than residential property tax. Hence, the property tax of hoteliers will get reduced," said Prabhakar Shinde, group leader of the BJP.

"There should be no hike in property tax at least for another year. The common man is already facing lots of challenges due to the pandemic," said Ravi Raja, leader of Opposition in the BMC. He added that he is going to write to Chief Minister Uddhav Thackeray about this.

"The BMC should consider a rebate for commercial properties like shops, offices, hotels, restaurants which have suffered the most," said Viren Shah, president, Federation of Retail Traders Welfare Association (FRTWA).

He added, "Instead of thinking of an increase in taxes for the middle-class Mumbaikar, the government should collect outstanding taxes or auction the properties of defaulters."

"We are surprised with the proposed hike. Our establishments are totally shut and we have been pleading with the state government to waive property tax. It's strange that the BMC is considering a hike instead of offering relief," said Pradeep Shetty, senior vice-president, Hotel and Restaurant Association Of Western India (HRAWI).

Rs 4,100 cr collected till Mar

The BMC collected Rs 4,100 crore in property taxes till March 20, against the target of Rs 6,780 crore for the fiscal year 2020-21. The BMC has over Rs 20,000 crore pending in property tax.

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No. of years the property tax rate is revised in