Maharashtra set to take ordinance route for full property tax waiver
As the Opposition tries to corner the state government over its promise of a full property tax waiver for Mumbai flats below 500 sq ft of carpet area, the ruling Shiv Sena-BJP combine proposes a new ordinance to fulfil its commitment.
“We may bring in a new ordinance or introduce a bill in the monsoon session of the state legislature for a compete waiver of property tax for 500 sq ft homes. The current ordinance has done away with the general tax component. The new ordinance will come out after the results of the Lok Sabha elections are declared. Till then property tax bills may be kept on hold for 500 sq ft homes." The Assembly’s monsoon session begins on June 25, so an ordinance before that is likely, the minister said.
Meanwhile the BMC has stopped issuing fresh property tax bill to home owners whose flats measure less than 500 sq ft even though it hasn’t heard anything from the state government about a new ordinance.
The Congress had accused the BJP-Sena of cheating citizens when it came to light that the state government in its ordinance issued in March this year had waived only 10 per cent of the property tax.
Terming the property tax waiver a travesty, city Congress chief Milind Deora had last month exhorted home owners in Mumbai, whose flats fall in that category, not to pay property tax to the BMC. Congress corporator Asif Zakaria, who had first raised the issue in BMC, had written to Municipal Commissioner Ajoy Mehta to issue a clarification on whether the property tax waiver is applicable on the entire tax or just the general tax component. He alleged that 100 per cent waiver was a “farce”.
Under pressure from the Sena, the state government had issued an ordinance waiving property tax for 500 sq ft homes in February this year. However, a scrutiny of the fine print revealed that only the ‘general tax’ component of the property tax would be waived while residents have to pay eight other components.
Typically, property tax comprises nine components and ‘general tax’ covers only 10-30 per cent of the total tax component. The other components are water tax, sewerage tax, education cess for the BMC and the state government, tree tax, water benefit tax, and employment guarantee tax for commercial properties.
Property tax biggest source of income for BMC
Property tax is now the biggest source of revenue for the BMC, especially, after octroi was subsumed by GST. The property tax collection target for 2018-19 was Rs 5,206 crore. The BMC had a property tax system in which tax was calculated on the bases of rateable value (rental value). In 2012, the new capital value (actual property value) property tax system was instituted with retrospective effect from 2010.
“We may bring in a new ordinance or introduce a bill in the monsoon session of the state legislature for a compete waiver of property tax for 500 sq ft homes. The current ordinance has done away with the general tax component. The new ordinance will come out after the results of the Lok Sabha elections are declared. Till then property tax bills may be kept on hold for 500 sq ft homes." The Assembly’s monsoon session begins on June 25, so an ordinance before that is likely, the minister said.
Meanwhile the BMC has stopped issuing fresh property tax bill to home owners whose flats measure less than 500 sq ft even though it hasn’t heard anything from the state government about a new ordinance.
The Congress had accused the BJP-Sena of cheating citizens when it came to light that the state government in its ordinance issued in March this year had waived only 10 per cent of the property tax.
Terming the property tax waiver a travesty, city Congress chief Milind Deora had last month exhorted home owners in Mumbai, whose flats fall in that category, not to pay property tax to the BMC. Congress corporator Asif Zakaria, who had first raised the issue in BMC, had written to Municipal Commissioner Ajoy Mehta to issue a clarification on whether the property tax waiver is applicable on the entire tax or just the general tax component. He alleged that 100 per cent waiver was a “farce”.
Under pressure from the Sena, the state government had issued an ordinance waiving property tax for 500 sq ft homes in February this year. However, a scrutiny of the fine print revealed that only the ‘general tax’ component of the property tax would be waived while residents have to pay eight other components.
Typically, property tax comprises nine components and ‘general tax’ covers only 10-30 per cent of the total tax component. The other components are water tax, sewerage tax, education cess for the BMC and the state government, tree tax, water benefit tax, and employment guarantee tax for commercial properties.
Property tax biggest source of income for BMC
Property tax is now the biggest source of revenue for the BMC, especially, after octroi was subsumed by GST. The property tax collection target for 2018-19 was Rs 5,206 crore. The BMC had a property tax system in which tax was calculated on the bases of rateable value (rental value). In 2012, the new capital value (actual property value) property tax system was instituted with retrospective effect from 2010.
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