The Brihanmumbai Municipal Corporation (BMC) clarified on Thursday that while property tax rates in Mumbai have not been increased, residents across the city have received higher tax bills this month. The surge in the amount payable is due to a long-overdue revision in the capital value of properties. As per Section 154(1)(c) of the Mumbai Municipal Corporation Act, 1888, the capital value of properties must be updated every five years. However, the last revision was done in 2015, and the one scheduled for 2020 was postponed due to the COVID-19 pandemic. Consequently, the current revision—after a decade-long gap—has resulted in an average hike of 15.89% in tax bills.

Capital Value Update Triggers Higher Tax Liabilities

The core reason behind the inflated property tax bills lies in the recalibration of capital values, which form the basis for tax computation. The capital value reflects the market price of a property and is used to determine the property tax amount owed. Over ten years, property prices in Mumbai have appreciated significantly, prompting a natural increase in the tax burden when valuations were finally updated. The BMC emphasized that this process is mandated by law and not a discretionary policy change. For most homeowners, this resulted in a sharp upward adjustment of their tax dues, even though the official tax rate remains unchanged.

Government Intervention Halts Additional Charges

Following backlash from city residents and political leaders, Maharashtra Chief Minister Devendra Fadnavis and Deputy Chief Minister Eknath Shinde intervened to address concerns about the financial burden. Acting on their recommendation, the BMC announced a stay on the implementation of new solid waste management fees. This decision came as a relief to many Mumbaikars who were already grappling with rising living costs. The Chief Minister’s office indicated that the timing of this financial burden, coming just before the BMC elections, could further strain public sentiment and voter trust.

Small Homeowners Exempted from Tax

Amid the growing debate over property tax increases, the BMC reiterated that residential properties measuring 500 square feet or less will continue to remain exempt from paying property tax. This exemption, first introduced to protect lower-income households and small flat owners, serves as a buffer against inflation-driven revisions. While this protects a significant segment of the population, middle-class and upper-middle-class homeowners living in larger units are bearing the brunt of the capital value updates. The civic body’s communication emphasized its commitment to equitable taxation while also fulfilling legal requirements.

Political Backdrop and Implications for Upcoming BMC Elections

The timing of the revised property tax bills has political implications, with the long-overdue BMC elections just weeks away following a Supreme Court directive. The issue of higher tax bills could become a key talking point during the campaign, especially for opposition parties seeking to challenge the ruling alliance. Public perception about governance, affordability, and transparency in civic administration is likely to influence electoral outcomes. The ruling government’s swift intervention to pause new fees may be aimed at containing the fallout, but the broader issue of urban affordability remains a long-term concern in Mumbai’s dynamic real estate environment.

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Source : indiatoday.in