Bangalore’s bullish property tax

Bruhat Bengaluru Mahanagara Palike (BBMP), the municipal cooperation of Bangalore is set to increase property tax rates by 20-25 % from April 2019 and there will be a high financial burden on those property owners whose property zones have been shifted from a lower tax slab zone to a higher tax slab zone.

Dhananjaya, the assistant revenue officer of BBMP said, “In the 2019 budget, we have mentioned the property hike proposal.  Our main aim is improve infrastructure in the city, it is for the benefits of the citizens itself.”

According to the Karnataka Municipal Co-operation Act, BBMP is allowed to increase the tax rates once in every 3 years and the previous hike were in 2016. This year, there is said to be a 20% hike in commercial property taxes and 25% hike in residential property taxes.

There are many properties whose tax slabs zones have changed this year due to the growing rate of development in the area. These property tax owners have to pay the additional tax slab difference as well as the new property tax hiked rate.

Mira Suresh, a resident of Chickabanavara said, “I pay Rs. 2900 for my property tax; my house comes under zone D. After the construction of many colleges here like Acharya college and Sapthagiri college, we now come under Zone C. Because of this, I have to pay Rs. 3600. On top of that, with this 25% hike, I will pay another 1000 rupees extra. So, I am paying 1600 rupees more. For someone like me, whose salary has not increased in years, it is such a huge burden.”

Bangalore’s tax rates are calculated based on the unit area value method where there are different zones and each zone has a different tax rate based on the development of the area.

Zone A includes areas like Malleshwaram and MG Road that are developed and have the highest tax rates and Zone F includes parts of Narasimah Colony and Kasturba Nagar that are under-developed and have the least tax rates.

George Kuresh, an urban planned from GKK urban planners said, “It is necessary to improve infrastructure in the city, but collecting such high tax rates at one go is very unnecessary. The BBMP should first finish the projects that are in progress, only then will the people have some confidence in them. Right now, all these property owners will only feel forced to pay such high rates without getting anything in return.”

In a press release, Manjunath Prasad the BBMP commissioner said that the BBMP is expected to earn additional revenue of Rs. 500 crores after the new taxes rates are levied.

According to the 2018-2019 data, the BBMP had a target of Rs. 2600 crores but they collected only Rs. 1700 crores. They fell short of Rs. 800 crores.