MUMBAI: Mumbaikars who live in older buildings in South Mumbai and pay a minuscule property tax as compared to those in newer constructions might have to pay more in the near future. In a bid to iron out the inequities in property tax and also to amass more revenue, the state government on Thursday agreed in principle to amend the 117-year-old property tax law for the city.
At a presentation on the new proposal in Mantralaya, chief minister Vilasrao Deshmukh approved a move from the rateable value system to a market value-based system. Under the present system, property tax is levied based on the rateable value.
In the proposed system, it will be a percentage of the market value calculated on the basis of the figure set out in the stampduty ready reckoner.
Those living in dwelling units of less than 350 sq ft will be given the advantage of a slab-wise increase in rate over a period of 20 years.
The meeting was also attended by finance minister Jayant Patil,municipal commissioner Johny Joseph and the secretaries of the state urban development, finance and housing departments. Sources said the government was earlier inclined to issue an ordinance to effect the change but Deshmukh later decided against it. The matter will now be put up before the state cabinet for its inprinciple approval and to facilitate a public debate on the issue.
The BMC had appointed consultants from Mumbai University and the Tata Institute of Social Sciences to devise a new system for property tax. Under the present system, those residing or having businesses in older premises pay a much lower amount than those who own new property. While residents of old structures pay between 10 paise to Re 1 per square foot, those in recently developed properties pay Rs 3 per square foot.
In the new proposal, those paying a low amount will be eased into the new regime gradually and over a period of 20 years, with property tax doubling every five years, while those paying a high amount will get relief to the extent of 50 per cent.
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