Waiver of taxation for property in Mumbai approved for apartments of up to 500 sq ft.

By Abhay Shah, Realty Quarter

On Monday, the state legislative council approved the law giving a tax exemption for residential properties whose carpet area is within 500 square feet.

While the proposal was tabled, Devendra Fadnavis, said that the government chose to waive property tax in Mumbai only because the BMC is financially viable and can achieve the revenue hit. He said that 75% of house owners in the town will advantage from the move. Also said that any other municipal corporation that wishes to spread the aid within its jurisdiction will be given its nod. “Financially stable are a couple of municipal corporations and they can put forward a proposal if they want to provide citizens such a benefit, and the government will support it,” said Fadnavis.

Some MLCs have raised citizen’s demand for relief in water tariff. Fadnavis said water supply are a service, and if services were provided free of charge, then these services would be of no value. “The cost of water is economical. If this is also waived, then people won’t make wise use of it.”

Shiv Sena pledged to waive property tax before the civic elections in 2017. The suggestion to grant the waiver in July 2017 was clarified by Brihan Mumbai Municipal Corporation (BMC) and was sent to the state for clearance.

Senior Urban Development Department (UDD) officials have said that in Mumbai there are 17 lakh flats that are less than 500 sq ft. It will reduce the property tax revenue of the BMC by more than Rs.380 crore. Officials said that the nominal property tax is presently charged on houses of up to 500 sq ft.

Property tax is the BMC’s main source of income, particularly after GST is granted. The 2018-19 property tax aim is Rs.5,206 crore.