Property tax collections by the Brihanmumbai Municipal Corporation (BMC) this year have yielded Rs 1,633 crore half of the total demand of Rs 3,355 crore. The civic body had sent revised provisional bills for 2010-13 with retrospective effect to owners of 2.8 lakh properties. These bills were based on the capital value of the property as against the old rateable value.
The deadline for payment was September 30.
Commercial property owners form the majority of defaulters,while most residential property owners have made payments. For every month defaulters delay payment,two per cent of the due amount will be charged as penalty, said an official from the Assessment and Collection Department of the BMC,who did not wish to be named.
Four years ago,defaulters were charged a one-time penalty of 20 per cent of the due amount. Commercial builders exploited the older penalty system by not paying for long periods. The new penalty system does not allow this, said the official.
In a bid to discourage delay in payments,the civic administration has also threatened to seize the property of defaulters. Three-month payment delay will result in the property being put up for auction. At the end of December this year,a list of defaulters will be drawn up and further action will be taken, the official said.
With the introduction of the new property tax system,online payment was discontinued last month,causing long queues at the 24 citizen facilitation centres (CFCs). The new system of tax calculation had to be streamlined with the payment software. The software,which failed to cope with the new system,crashed and seriously affected bill payment at CFCs.
Payments at CFCs were delayed for a few days due to software glitches,but that did not prevent us from accepting them. In spite of the inconvenience,we managed to facilitate payments as planned, said Deputy Assessor and Collector Prabhakar Bhute.
After it delayed issuing of new property tax bills for the second time,the BMC finally sent out bills in January. In May last year,the BMC standing committee had approved the new capital value system,which bases property tax on the ready reckoner rate. The capital value system calculates tax based on use of a property,construction,type and age,while the rateable value system was based on rent a property could command in April 2010.
Owners of residential and commercial buildings that came up post-2010 will have to pay arrears from April 2010. The final amount for old buildings receiving provisional bills will be adjusted to reflect the outstanding amount calculated according to the new system. The new system increases tax for properties in island city,while residents in suburbs will have to pay less than the present rate.
Property tax and octroi collections are the two largest money-spinners for the Rs 27,000 crore-rich BMC.