House owners in Mumbai with less than 500 sq ft homes won’t see a hike in property tax for the next five years. Maharashtra lawmakers on Wednesday approved a legislation in this regard. The government had earlier issued an ordinance to this effect. It said over 11 lakh home owners would benefit from the move.
The property tax regime in Mumbai switched over from the old rateable value model where property tax was levied on the basis of rentals that a property would fetch to the capital value that was based on the market value in 2010.
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For the first five years under the new regime, all properties occupying less than 550 sq ft carpet area were exempted from any hike in tax that was charged under the previous regime. In 2015, however, the civic administration had initially proposed to include even such properties in the segment where the taxes would rise.
The political leadership in the Brihanmumbai Municipal Corporation however opposed the move, forcing the civic administration and then the government to exempt properties less than 500 sq ft area from any increase in tax yet again.
During discussion on the Bill, legislators from both ruling and Opposition benches complained that the civic administration had amassed more revenue than due by collecting taxes on the basis of built-up area instead of the carpet area. BJP’s Parag Alavani demanded that the additional amount collected from citizens, which was to the tune of Rs 1,200 crore over five years, be returned.
The government said all suggestions made would be considered.
Congress’s Naseem Khan demanded that the exemption be increased for 15 years for the beneficiary segment. He also demanded trifurcation of the civic body.