No property tax on flats below 500 sq.ft, 60% concession for ones between 501-700 sq.ft

No property tax on flats below 500 sq.ft, 60% concession for ones between 501-700 sq.ft
The decision to waive property tax will affect around 64 percent or 14.98 lakh residential properties in Mumbai and cost BMC roughly Rs 350 crore (Representational Image)

The state cabinet on Friday approved the proposal to exempt residential properties of up to 500 sq.ft in Mumbai from property tax, in a likely bid to woo urban middle-class voters ahead of the Lok Sabha polls.

The waiver, taken at a cabinet meeting held in Mumbai yesterday, will be applicable with retrospective effect from January 1, 2019. The proposal of property tax waiver was mooted by Uddhav Thackeray-led Shiv Sena during the Mumbai civic body polls in 2017.

The same year, the BMC passed a proposal to waive property tax for residential houses up to 500 sq.ft (carpet area) and provide 60 percent concession in tax for houses ranging between 501 and 700 sq.ft (carpet area).

While the decision to grant a concession for the 501-700 sq.ft flats lies within the civic body’s rights, the proposal to grant a tax waiver requires an amendment in the Mumbai Municipal Corporation-1888, which needs state cabinet nod.

The matter had been pending for almost two years as officials were reluctant to clear the proposal due to loss of revenue.

It was only recently when the Shiv Sena put it as one of its demands during the pre-poll alliance talks with BJP that Chief Minister Devendra Fadnavis agreed to it.

The state cabinet’s nod came on Friday, which is likely the last meeting before the Model Code of Conduct for the general elections comes into effect.

According to officials, the decision to waive property tax will affect around 64 percent or 14.98 lakh properties in the city and cut the BMC’s projected earnings by roughly Rs 350 crore.

The civic body collects a property tax of about Rs 5,500 crore a year.

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