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In a circular released on April 17th, N Satyanarayana, the Director of Municipal Administration, instructed all municipal corporations within the Hyderabad Metropolitan Development Authority (HMDA) boundaries to adhere to the current process of evaluating property tax until a final resolution was reached. Several civic bodies have enforced the capital value assessment, causing property taxes to surge by almost double.
The municipal administration and urban development department have come to a decision to provide property owners with significant relief by postponing the calculation of property tax assessment from a unit rate-based approach to a capital value assessment (CV) approach.
According to the circular, it is crucial to thoroughly analyse and investigate the effects of a significant rise in property tax, particularly on individuals belonging to the middle and lower-middle income brackets. Satyanarayana emphasized the importance of examining the repercussions in detail.
As per a high-ranking official of a corporation, the director has instructed the entities to comply with the government's directives and adhere to the current property tax system until additional orders are issued. Additionally, the director cautioned that any noncompliance with the new guidelines would be taken seriously.
The Tellapur municipality has adopted capital value assessment, but its citizens are advocating for a return to rental value-based assessment. The inhabitants expressed concerns that appraisals grounded on the value of assets would negatively affect the finances of middle- and lower-income households.
The Capital Value System computes tax based on a fraction of the actual worth of the property in the market. The government takes the location of the property into account when determining its market value. Every year, the market worth is disclosed and updated.
The tax under the Capital Value System is determined based on a percentage of the property's current market value. The valuation of the property in the market is established by the government, and it is dependent on the property's geographical location. The published market value undergoes an annual revision.
The Unit area Value System works by the initial assessment of property value, based on factors such as location, land cost, and how it is used, as determined by the municipal authorities. The actual tax value is obtained by multiplying the aforementioned amount with the built-up area.
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