Attention Bengalurians: Bengaluru will get a new property tax structure from April; The rental burden is expected to increase
Bangalore: The Bruhat Bengaluru Mahanagara Palike value-based property tax, which will be implemented from April 1, will impose an additional burden on property owners who have rented out their properties for residential and commercial purposes in Bengaluru city. This large increase in property taxes will likely further increase rents for tenants who are already facing higher rental costs. Under the new tax system, tenants will have to pay twice as much tax as for independent homes, while the rate for other categories of commercial buildings will increase three to five times.
Bengaluru: New property tax structure
The current rule includes seven rates for rental properties, such as paying guesthouses, convention halls or shopping centers. However, things like having an air conditioner or escalators do not count towards the tax structure.
Traders and property owners expect an increase in the annual BBMP tax by at least 40 percent as the guideline value has been increased by 33 percent. The BBMP limited the property tax increase to 20 percent in the new notification, and the owners will still have to pay the difference in the next tax.
Reacting to a case of increasing property tax on rental buildings, Clement Jayakumar, a resident of Mahadevapura, said he is concerned about the BBMP doubling the tax on rental properties and apartments and not offering tax in return. additional service.
“The new rule will have a spiraling effect and ultimately tenants will have to bear the additional costs,” he said.
A senior BBMP official has rejected the tax hike ten to twenty times.
“This is not a new model that we are adopting. Almost all cities in Karnataka have adopted the value-based property tax system. The BBMP conducted a test for over six lakh cases to see the implications of the new system. Overall, we have determined that property tax collections will not increase beyond 5 percent. So you don’t have to worry,” the official said.
Public policy professional shared his thoughts
According to a public policy professional, the Palike came up with a zone classification to calculate property taxes without mapping all the streets.
“Even now, not all streets are mapped, and this will lead to many errors in the calculation of the tax,” said the professional. “There is also a possibility that property taxes will increase dramatically for some buildings,” he said.
buildings.