Mah govt freezes property tax in Mumbai for next five years

In a major relief to nearly 2 crore Mumbaikers and an estimated 17 lakh middle-class residents of Mumbai, a majority of whom stay in chawls and older buildings in the island city, the state government has decided to put a freeze on the property tax paid by such residents for the next five years.

In other words, occupants and owners of residential flats (carpet area of 500 sq ft and below) will now pay a fixed property tax, matching the amount paid last (till March 31, 2015) for the next five years.

A bill to this effect was tabled in the assembly by the state government stating, "For five years, commencing April 1, 2015, the amount of property tax 'leviable' on residential tenements having a carpet area of 46.45 sq metres (500 sq ft) or less shall not exceed the amount of property tax being levied and payable in respect of such residential building/tenements as on March 31, 2015."

According to informed sources, the bill which has also been termed as an agenda for the forthcoming civic elections is likely to be passed soon. The decision was taken in view of the potential impact on small flat owners of the recent revision of the property tax on the basis of capital value, effective from April 1 this year that would have increased the rates by upto 40 percent.

The state cabinet had approved the decision a month ago but the Shiv Sena had demanded permanent exemption. Once passed by both Houses, the bill is expected to provide major relief to nearly 2 crore residents of small flats in the city.
 
The new tax system unveiled about a year ago is based on the type of construction of the property, its location, age and carpet area of the property. The Brihanmumbai Municipal Corporation (BMC), the city’s civic body earns approx INR 3,000 crore, in revenue via property tax.
 
The state has found it necessary given the circumstances to amend the Mumbai Municipal Corporation Act. The civic house had also approved the demand and forwarded a proposal to the state.

Bill to protect tenants of old buildings

In a related development, the Maharashtra government is also mulling a new bill to protect the rights of tenants in old dilapidated and cessed buildings across the city.
 
Making the announcement recently in the Assembly recently, Chief Minister Devendra Fadnavis stated his government will come up with a new bill to protect rights of tenants so that they would be able to get house of their own expeditiously.
 
He further added that the bill will be introduced in the ongoing Monsoon session of the Assembly and if not passed, the government would promulgate an ordinance to this effect.
 
Cessed buildings are those structures whose occupants pay a repair cess (tax) to the Maharashtra Housing and Area Development Authority (MHADA). The Municipal Corporation of Greater Mumbai (MCGM) has issued evacuation notices to tenants in thousands of cessed buildings, which are dilapidated, under section 354 of the BMC Act.
 
However a majority of tenants in the estimated 2,117 buildings in Mumbai declared 'dangerous', have refused or delayed vacating the premises since they are unsure about getting their homes back after the redevelopment of such buildings. This is one of the prime factors responsible for the loss of many lives in recurring incidents of old buildings collapsing in the city.