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The Brihanmumbai Municipal Corporation (BMC) has released the latest property tax bills for the financial year 2023-24, and there is no increase in property taxes. With just one month left for the current financial year 2023-24 to end, the BMC started sending property tax bills next week.
The bills were delayed due to legal complexities in BMC's retrospective tax assessment. Also, the ordinance for the issuance of bills was signed by the governor on February 5, after which the soft copies of the two bills were issued on BMC’s website. The BMC has so far collected INR 708 crores out of the targeted property tax of INR 4,500 crore in this fiscal.
The BMC had issued security/ad-hoc bills with a 20% hike in December 2023. After opposition from the citizens, the civic authorities withdrew the provisional bills and clarified that there would be no hike in the property tax in the current fiscal year. The issuance of bills was further delayed since the BMC required the approval from the governor to issue bills.
The taxpayers will get just one month to pay their bills, after which they will have to pay 2% of interest on the bill as a late fee per month. Every year, the deadline to make full payment is March 15. But as the bills were issued late, the last date has been kept as March 31.
Property tax is the second-highest revenue source for BMC, Octroi being the highest source. During the fiscal year 2022–23, the BMC collected INR 5,792 crore in property taxes. The revenue from property tax for the current financial year has been revised to INR. 4,500 crore from the initial estimate of INR. 6,000 crore. However, the BMC's assessor and collection department has so far been able to collect INR. 708 crore of property tax from April 1, 2023, to February 25, 2024. More than 3,000 crores of arrears are yet to be recovered from previous years.
The BMC has witnessed a decline in revenue over the last three years. The exemption of property tax for residential properties measuring up to 500 square feet has resulted in a loss amounting to INR 462 crore. The postponement of the revision in tax after the pandemic, extending until 2023, led to a decrease in revenue of INR 1,080 crore. Consequently, the revenue target for the current fiscal was also brought down from INR 6000 crore to INR 4500 crore.
As per the rules, property tax rates are hiked every five years. The last revision of property tax by BMC dates back to 2015. It was due to be hiked in 2020-21. Subsequently, the revision of property tax was deferred for 2020–21 and 2021–22 due to the impact of Covid-19. In 2022–23, the BMC further deferred the revision by a year. But the BMC required a nod from the state government every year to not hike tax rates.
The BMC's decision to issue fresh property tax bills without a hike is a welcome move that will benefit Mumbai property owners. It demonstrates the corporation's commitment to addressing public concerns and providing financial relief during these uncertain times. However, it is also a necessity for BMC to raise tax rates to improve the city's infrastructure. Consultation with citizens would be the best forward for the smooth execution of such policy matters.
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