Mumbai: BMC Increases Property Tax After Nearly a Decade, with Hikes of Up to 15%

MUMBAI: For the first time in almost ten years, the Brihanmumbai Municipal Corporation (BMC) has revised its property tax rates, raising them by as much as 15% for the financial year 2025–26.

This revision applies to over 9 lakh properties across Mumbai, with updated bills having already been issued earlier this month, according to a report by Richa Pinto.

A civic official clarified that while the maximum increase is capped at 15%, the actual percentage may vary depending on the ready reckoner (RR) rate applicable in each locality.

RR rates serve as a benchmark for determining the market value of properties and are used for calculating stamp duty and taxation. The official confirmed that the recent uptick in RR rates was taken into account while implementing the new tax structure.

Importantly, the exemption for smaller residential properties remains intact. As per a directive issued by the state government in 2017, around 3.6 lakh residential properties with a carpet area of less than 500 square feet continue to be exempted from property tax.

Under the new rates, a property that previously incurred a tax of ₹10,000 would now be liable to pay ₹11,500, assuming the full 15% hike is applicable. However, many residents have expressed concern that the actual increase appears to be much higher in some localities than what has officially been stated.

For instance, a flat owner in Andheri West revealed that their property tax bill has increased from ₹29,211 in the previous year to ₹36,898 for 2025–26, which translates to a nearly 26% hike. Similarly, a resident of Bandra West reported that their tax bill rose from approximately ₹1.10 lakh last year to ₹1.36 lakh this year, indicating a 23% increase.

The last property tax hike in Mumbai occurred in 2015–16. As per BMC’s policy, property tax rates are supposed to be reviewed every five years, which would have meant a revision in 2020.

However, the COVID-19 pandemic led to a postponement of the decision. Subsequent political developments in the state further delayed any revision. In 2024, the municipal corporation announced that 2025 would be considered the completion of a full five-year cycle, making it a suitable time to implement the revised tax rates.

Additionally, the state government’s move in March 2025 to raise the ready reckoner rates by an average of 3.39% contributed to an increase in property valuations, which many anticipated would soon be followed by a corresponding hike in property taxes.

Nevertheless, BMC has not adjusted its property tax collection target of ₹5,200 crore for the year 2025–26, despite the upward revision in rates. Officials stated that the impact of the increase is still being evaluated and has not yet been fully assessed.

Former corporator of Bandra West, Asif Zakaria, described the property tax hike as “alarming,” especially considering that the BMC has been operating without elected representatives for the past three years.

Zakaria also highlighted that the implementation of a new taxation system based on the capital value of properties has yet to be resolved, leaving taxpayers in a state of uncertainty.

He further criticized the civic body for failing to comply with clear directives from the judiciary. “This is an issue that continues to place an unjust burden on Mumbaikars, despite multiple unambiguous directives issued by both the Supreme Court and the Bombay High Court.

No action has been taken to amend Rules 20, 21, and 22 as instructed by the courts. These corrections are crucial, as their implementation is expected to reduce property tax bills by as much as 40% for the period from 2010 through 2024–25,” he said.

Echoing this concern, Mumbai North Central Member of Parliament Varsha Gaikwad criticized the BJP-led state government, accusing it of imposing another financial hardship on the city’s residents.

She referred to the new property tax bills as a “brutal” increase ranging from 13% to 20%, which she claimed blatantly violates directives from the Supreme Court. Gaikwad said, “Without making the necessary revisions to the Capital Value rules — as mandated by the Supreme Court — and without reassessing taxpayers in accordance with those rulings, the state-controlled BMC has started issuing new property tax bills that are significantly inflated.”