BENGALURU: The recent BBMP announcement hiking property tax by 20% to 25% appears to be hogwash: a deeper analysis of the notification shows the hike could vary from 40% to 100%, depending on the tax zone.
A cash-strapped BBMP is cutting deep into the citizen’s pocket, with a reorganization of tax zones. The target appears to be the suburbs – residential and commercial property owners in Whitefield, Mahadevapura, Bommanahalli, Hebbal, Outer Ring Road, Kanakapura Road and Bannerghatta Road may have to bear with a minimum hike of 40%.
BBMP revenue officials are busy fixing new property tax slabs as per the recent tax notification, and some scary figures are emerging. The reorganization of tax zones was carried out by the civic body last year, with a number of areas being upgraded depending on land value and facilities.
The city is classified into six tax zones — A to F, with A the high tax bracket, and reducing to F, the lowest bracket. As a result of the reorganization, some areas have been moved from the lower E and F zones to D, C, B or A zones, where the tax is heavy. “Owners of properties which have moved to higher tax zones have to cough up more tax. The recent property tax hike has come as an additional burden to them. In some cases, where properties have jumped multiple zones, the tax may go up 100% per cent or more. Commercial property owners will be the worst hit,” said a source.
However, M Shivaraju, chairman, standing committee on taxation and finance, BBMP, explains that a clear picture of the new property tax slabs will emerge only after the civic body finishes with the process of calculating tax slabs. “I agree there is a burden on the citizen due to reorganization of tax zones. But I think it may go up to only 35%. Here too, the hike could burden commercial properties while residential property owners can take advantage of depreciation (older the building, more concession in property tax), which will further reduce the total tax amount. If residents pay the tax in the first month of the new financial year, they are entitled to a 5% rebate as well,” he added.
Jayaram C, a resident of Indiranagar, said this abnormal increase in property tax was beyond the reach of the common man. “This hardship will be unbearable for citizens. The revenue generated by way of property tax is spent without any accountability to the public. The BBMP has to publish clear details for the awareness of citizens,” he added.
Bengaluru tax rates lower than other metros
Experts say the city’s property tax slabs are low compared to metros like Delhi, Mumbai and Chennai. Urban expert Suresh R said one can’t directly compare tax between two cities, as a lot depends on local guidance values and other parameters. “However, even if one includes the recent hike, Bengaluru is still down by at least 30%, compared to other cities. But a larger study is needed to calculate proper figures,” he added.
M Shivaraju, chairman, standing committee on taxation and finance, BBMP, said they did check on property tax collection and related parameters of other city corporations and found Bengaluru was much lower.
Credits ET Realty