The South Delhi Municipal Corporation (SDMC) has partially approved the third municipal valuation committee’s (MVC) report . While increase in property tax rate for residential properties was rejected, the implementation of the report will lead to a substantial increase in property tax for industrial and other non-residential areas.
The changes, which will be implemented from April 1, are estimated increase revenue collection for SDMC by Rs 80 crore annually, senior SDMC officials said.
The property tax is certain percentage of the annual value of property. The annual value of a property is determined on the basis of six factors — age, unit area, structure, occupancy, area and use factor.
“The biggest changes have been proposed in occupancy, unit area and use factor in MVC-III, while age and structure factors have remained unchanged. For example, for non-residential rented properties, the occupancy factor has been made ‘two’ instead of existing ‘one’. That means, the amount paid by the occupant will be double now,” said a senior SDMC official.
Likewise, in case of industrial property lying vacant, the use factor has been made ‘four’ from exiting ‘two’.
“Hundreds of industrial units have been lying vacant in Mayapuri and other industrial areas for years. To discourage owners for leaving their units vacant, we have decided to increase the use factor,” said Balram Oberoi, standing committee member and councillor from Rajouri Garden.
For banquet halls, the use factor will be increased from existing ‘four’ to ‘six’, and for guest houses it has been increased to ‘two’ from ‘one’.
“Keeping in view the handsome rent earned by the property owners from telecom towers, we have increased the use factor of such buildings from ‘two’ to ‘four’. Likewise, for entertainment and recreational clubs such as swimming pools, cinema halls and malls, the use factor has been increased from ‘three’ to ‘four’,” said the SDMC official.
Irrespective of the category in which an industrial unit falls, it has all been decided to treat all of them under category ‘D’ and impose property tax accordingly. “The categories of property are determined on the basis of circle rates fixed by Delhi government. A circle rate is the minimum property rate defined by the government for specific areas. At present, most of the industrial units fall under ‘E’ category and with the implementation of MVC- III report, the increased slab rates will be imposed,” said a SDMC official, who did not wish to be identified.
No increase in residential property tax
South Corporation standing committee chairperson Shika Rai, meanwhile, rejected all proposals brought by the commissioner to hike taxes on the annual value of property to generate revenue.
Rai also introduced an amnesty scheme to waive off 100% interest and penalty for residents who have not paid taxes since 2004.
In December, while presenting the financial budget for year 2019-20, SDMC commissioner Puneet Goel proposed to hike tax on properties falling under A and B category at the rate of 14%, from the current 12%. Similarly, in the C, D and E categories, tax bracket will be 12%, up 1 percentage point. For the F, G and H categories, tax will be 8%, instead of the 7%. The rates are based on the annual value of the property.