The Hindu : Karnataka / Bangalore News : ‘Property tax method based on court norms’

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Wednesday, Dec 10, 2008
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Karnataka

Karnataka - Bangalore

‘Property tax method based on court norms’

Staff Reporter

Supreme Court has approved four methods to calculate value of a property: official

Bangalore: “The property tax system introduced in Bangalore city has adopted one of the methods approved by the Supreme Court and there is no scope for discrimination by the officials of the Bruhat Bangalore Mahanagara Palike (BBMP), including its Commissioner,” said a senior officer of the Urban Development Department (UDD).

Speaking to The Hindu, the officer, who wanted anonymity, pointed out that the apex court had approved about four methods to calculate annual value of a property for levying property tax across the country and Karnataka adopted one among them.

As per the Supreme Court verdicts, the following four methods could be used for calculating annual value or rateable value of land or building.

The methods are: (i) Actual rent fetched by land or building where it is actually let; (ii) where it is not left, rent based on hypothetical tenancy, particularly in the case of buildings; (iii) where either of these two modes is not available, by valuation based on capital value from which annual value has to be found by applying a suitable percentage; and (iv) on the basis of the prescribed rate of rental value per square foot of the carpet area for different classes of holdings subject to its fixation and publication as per law.

“We have adopted the fourth method. Instead of using rent, we have used annual return from properties following verdicts from various courts related to Rent Control Act and property tax in different parts of the country,” the officer said.

Referring criticism by various organisations that BBMP Commissioner had been given discriminatory powers, the officer made it clear that the Karnataka High Court, while upholding property tax system introduced in the year 2000 based on the Annual Rateable Value (ARV), had upheld the power of the Commissioner to determine the value of the building/land applying the parameters laid down in the legislation.

Parameters

The Ordinance promulgated by the Government on October 25 also gave parameters based on which the Commissioner has to calculate the Unit Area Value (UAV), the officer said while clarifying that “The UAV is the same method that was upheld by the High Court and Supreme Court under the name of ARV system, which was introduced in 2000.”

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