Based on the recent draft notification issued by the Bruhat Bengaluru Mahanagara Palike (BBMP), property tax in Bengaluru is proposed to be calculated based on the guidance value of the property per square foot per year. However, there are concerns raised by stakeholders, particularly the Karnataka Home Buyers' Forum, regarding the fairness and accuracy of this method. They argue that relying solely on the guidance value may not accurately reflect the true value of properties or consider individual circumstances, such as the actual usage of the property and its amenities. Thus, the proposed method suggests a departure from previous tax assessment practices in Bengaluru.
In Bengaluru, a contentious issue has erupted over the proposed method for calculating property tax, prompting heated discussions among stakeholders. The recent draft notification from the Bruhat Bengaluru Mahanagara Palike (BBMP) has outlined a new approach, suggesting that property tax should be calculated based on the guidance value of the property per square foot per year. While this proposal aims to streamline tax assessments, it has raised significant concerns among homeowners, officials, and advocacy groups.
The Karnataka Home Buyers' Forum, a prominent advocacy group, has been at the forefront of expressing reservations about the new method. They argue that relying solely on the guidance value may not accurately reflect the true value of properties or consider the individual circumstances of property owners. Moreover, they stress that this approach overlooks critical factors such as the actual usage of the property and its amenities.
Dhananjaya Padmanabhachar, representing the Karnataka Home Buyers' Forum, highlighted the potential implications of the proposed method. He emphasised that property tax assessments should be fair and equitable, taking into account the carpet area of flats as mandated by the Real Estate Regulatory Act of 2016. Failure to consider these factors, he warned, could lead to discrepancies in tax assessments and add to financial burden on property owners.
The draft notification (section 8 (xiv)) states that property tax for common areas like offices, clubs, and parks in buildings or apartments will be half the rate charged for the property itself. Padmanabhachar, citing Section 17 of RERA 2016, asserts that these areas belong to the association of flat owners. He urges authorities to charge this tax to property owners and collect proof of association registration and conveyance deeds.
Section 8 (x) mentions that parking areas in buildings will be taxed at 50% of the property's unit area value. Padmanabhachar argues that since parking is a common area, not owned by individual flat owners, this tax should be levied on the association or promoters.
Padmanabhachar further stressed the importance of ensuring transparency and accountability in property tax assessments. He called for measures to prevent dual ownership issues, citing instances where previous land khata owners' names are retained even after flat khatas are issued. He suggested either the cancellation of land khatas upon issuance of flat khatas or the inclusion of all flat owners' names on the land khata to avoid confusion and legal complications.
Retired Commander Surendra also weighed in on the debate, questioning the validity of collecting property tax based solely on guidance value. He emphasised the need for a more nuanced approach that considers various factors beyond just property value.
While the BBMP maintains its stance on property tax collection, asserting that services such as garbage collection remain consistent regardless of property value, the ongoing debate underscores the complexity and significance of property tax assessments in big cities. As discussions continue, stakeholders are calling for a comprehensive and fair approach that addresses the diverse needs and concerns of property owners across the city.
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