While citizens will not be too happy with the increase in property tax, civic officials say the hike was a long time coming.
According to ruling party leader R.S. Sathyanarayana, the move will increase BBMP’s revenue by Rs. 700 crore and take the total to Rs. 3,000 crore. The city has grown by leaps and bounds and many areas that were once considered the outskirts have developed into prime commercial and residential pockets.
“Many of these areas that were in a lower tax bracket will come into a higher tax bracket," he said and added that tax revision had faced a lot of opposition due to populist sentiments.
Property tax rates were last revised in 2008, based on the 2007 guidance values. Ever since, guidance values have been revised thrice but the property tax rates weren’t re-examined.
Therefore, properties in the suburbs and other areas along Outer Ring Road, Kanakapura Road, Bannerghatta Road among others, that have recently emerged as the most happening real estate corridors, will bear the maximum brunt of this hike.
On the other hand, ‘Old Bengaluru’ – far removed from the glitzy glass buildings of ‘new’ IT hubs – will benefit. “Some old commercial and residential areas will actually benefit as their commercial value depreciated long ago but their tax did not come down. For example, Chikpet will see a tax depreciation of 40 to 30 per cent,” Mr. Sathyanarayana said.
Five per cent rebate
Property owners who pay the entire property tax in April 2016 stand to gain. As is the practice, the BBMP will offer a five per cent rebate to those who make the full payment in April.
"Depending on the response, the BBMP council may take a call on extending the rebate period," said M. Shivaraju, chairperson of the Standing committee for Taxation and Finance.
Online payment
The BBMP is pushing for online payment. Property owners whose tax is above Rs. 10,000 must take this option. The others can pay through cheques or demand draft at any of the BangaloreOne centres or BBMP's Citizen Service Centres.
M. Shivaraju, chairperson of the Standing Committee for Taxation and Finance, said that the move is likely to bring in more transparency.
“During inspection of zonal offices, we noted that several cheques had bounced. In some instance, the cheques had not been deposited or the funds not transferred to the head office. By ensuring that payments above Rs. 10,000 are made online, there will be no leakage in revenue.”
