In the face of mounting pressure to initiate new civic projects coupled with lack of sufficient avenues to raise funds, the Bruhat Bengaluru Mahanagara Palike (BBMP) has mooted a 25% hike in property tax in residential areas and 30% in commercial areas. If endorsed by the state government, the rates will take effect from April 1 next year.
Confirming the proposal, N Manjunatha Prasad, BBMP commissioner said, “Revision of property tax is being done as per the Karnataka Municipal Corporation Act which mandates revision once in three years. I have forwarded a note to the council in this regard.”
The civic agency’s revenue department has prepared a proposal to hike tax and handed it to Prasad. Palike officials described the proposal as “much required” since the civic agency is really having a hard time completing the ongoing projects or undertake new ones due to want of sufficient funds.
The commissioner will send the proposal to the Palike’s standing committee on taxation and finance. Subsequently, the proposal will be discussed in the BBMP council before being forwarded to the state government.
The proposal envisages a 25% hike in tax for properties that fall in the residential category, and a 30% hike for those in the commercial category. There are about 19 lakh properties in the city of which at least three lakh owners default on payment every year.
This year (2018-19), the Palike could collect only Rs 2,000 cr against the target of Rs 3,000 cr. The proposed hike will see the civic agency mop up an additional Rs 500 cr. Property taxes were last revised in 2016.
While tax for residential properties was increased by 20%, it was hiked by 25% for commercial properties. The government ratified the massive hikes because the BBMP did not revise taxes in 2008-09 or 2013-14 as mandated by the Act for political considerations.