Unit Area Value is same as ARV: BBMP


‘It is not another form of captival-value system’

In old areas, the increase is likely to be about 5 per cent

Heavy concession for residential use of the buildings

BANGALORE: The Unit Area Value (UAV) system is just another name for the earlier Annual Rateable Value (ARV) system for assessment of property tax and it aims at capturing the return or the rent potential of a property in a given location.

This is the explanation of the Bruhat Bangalore Mahanagara Palike (BBMP) on the UAV system introduced for the city as an alternative to the Capital Value System (CVS)-based tax assessment through an Ordinance promulgated by State Government recently.

While spiking the claims made by some organisations and individuals that UAV is indirect introduction of CVS, the BBMP said while the ARV was linked to the rent control laws, the UAV was outside the purview of such laws as the latter had been defined to mean expected annual returns from the property.

BBMP Deputy Commissioner (Resources) U.A. Vasanth Rao pointed out that it was necessary to delink the rent control laws from the property tax assessment because of verdicts given by various courts.

He said the “expected returns from the property” under the UAV system meant — the returns that could be rent, lease, mortgage or any form of considerations from the use of the property — based on its location, type of construction and usage.

The ARV system, which had no legislative support earlier, had now been introduced in the form of legislation and with some modification to widen the tax base, he said while clarifying that the UAV was not linked to the capital value (the value which is likely to be realised on sale of the property) of the land or building.

Although the BBMP is yet to publish the unit rate per square foot for the various use of the property in zones to be specified, the UAV system would be extremely considerate to residential usage and in many cases the increase would not exceed 10 to 12 percent of the tax paid previously, although the Ordinance has permitted the BBMP to increase the tax by 20 per cent compared to the previous year, Mr. Rao said categorically.

Marginal increase

In many cases, particularly in old central parts of the city, the increase would be between 4 and 5 per cent only, he said. However, if there was a change in the zone from the previous zone classification made in 2000, then the increase might be about 15-18 per cent, he said.

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