MUMBAI: The state government has issued an ordinance to facilitate the implementation of the capital value-based system for computing property tax. At present, the tax is computed on the rateable value system. The ordinance will enable amendment of the BMC Act.
The new system was supposed to be implemented in phases from April 1, 2010. The BMC will first implement the system in the island city.
Under the present system, the rent a property can fetch is used to calculate the rateable value, a percentage of which is the property tax. In the new capital value system, the value (a percentage of which will be the property tax) will be based on the actual value of the property. The figure will mostly be based on the stamp duty Ready Reckoner.
There will be an upper as well as a lower ceiling on increase or decrease of tax. The capital value tax will not increase more then 2 times the rateable value tax and it will not decrease more than 50% of the tax.
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