Hyderabad
Hyderabad is expecting
general revision of property tax from this month which is slated to hike property taxes for the next fiscal year. Property Tax is a major source of income for the GHMC and is levied on all lands and buildings within the municipal corporation limits. Recently, the GHMC commissioner MT Krishna Babu at a meeting convened to review property tax status asked the tax wing officers to raise demand notices (tax bills) for Rs 1,200 crore and to try and achieve a target of at least Rs 1,000 crore in the ongoing 2012-13 FY, aiming for about 33 percent increase from the tax target of Rs 752 crore raised for FY 2011-12.
The GHMC has been collecting a minimum of 50 to 60 paise per sft for residential buildings and a maximum of Rs 1.25 per sft. For residential properties in slums, only 40 paise was being collected from property owners. On the other hand, commercial buildings are billed between Rs 5 and Rs 20 per sft depending upon the area. GHMC plans to revise property tax rates based on locality, building type, usage and rental value.
This revision in rates comes amidst protests from the real estate community as well as property owners. Bimal Kedia, Managing Director, Theme Ambience Constructions says, “There is no need to increase property tax rates. The rental rates over the last decade have tripled generating more revenue. These new rates only burden the tax payer, and hold no good for the market.”
Moreover, there have been concerns over the quality of services provided by local bodies despite the revenue collected. Water and electricity shortage plague areas that have some of the highrise residential landmarks of the city. Also, poor connectivity within the city leads to a lack of basic amenities in many residential projects. Vinod A, GM, Marketing and Corporate Communications, PBEL says, “Most buyers of the projects from the top builders in the city don’t mind paying taxes but expect infrastructural facilities such as roads, water and sanitation. The civic authorities have been unable to adequately rise up to this requirement.”
Stoically maintaining silence on the issue is the GHMC except for citing details from their expenditure. A senior officer from the civic body says, “It is only a proposal at this stage and residential tax rates for the MCH area have not been revised for the last three decades. So we will carry out a survey aimed at collecting accurate comprehensive data of the developments within the GHMC limits. We will classify places according to the infrastructural facilities they receive and accordingly evaluate the rental value and tax. These will again be published officially. There will also be a ‘calling for objections’, after which the plan will be put into action. The whole process will take approximately six months to be put into action.”
Source: Times Property, The Times of India, Hyderabad