Relief as new building rates not for now

Relief as new building rates not for now
DH News Service, Bangalore:
The recently revised building rates (value) will not apply for calculating property tax under new capital value system for next three years starting 2008-09.


A good news for property owners in BBMP limits. The recently revised building rates (value) will not apply for calculating property tax under new capital value system for next three years starting 2008-09.

Instead, the old building rates will be applied. The maximum building rate before the recent revision, was Rs 680 per sq ft and the lowest Rs 220 per sq ft in BBMP area.

The Stamps and Registration Department has hiked the building rates after two years in the range of 20 to 30 per cent. The building rates are fixed depending on construction materials used like marble flooring, RCC, teak and others.

Under CVS, both the value of the site (guidance value as fixed by Stamps and Registration department) and the building value (as published in the Public Works Department’s schedule of rates) will be taken into consideration for fixing property tax. So it was feared that revision in the building rates would jack up the property tax amount, sources said.

Why doesn’t it apply to BBMP? “We have introduced the CVS for property tax collection from this year. As per the Karnataka Municipal Corporation Act, the tax rate and the building rates should not be revised for first three years. Hence, we will take the old rates into account while calculating property tax under the CVS,” BBMP Deputy Commissioner (Revenue) D L Chandrashekar said.

In fact, the CVS in BBMP limits will completely come into effect from April 2008. Presently, BBMP has been applying the new tax system for only newly constructed buildings from October 2007. However, it has already been implemented in all other urban local bodies of the State. Official sources said the Government will decide whether to apply the revised building rates or not while calculating property tax in other ULBs.

Blow for buyers

But those buying property, the revision has come as a blow. For it will automatically increase the stamp duty amount payable while getting the property registered.

Stamp duty is imposed on total value of the property (both the site and the building), official sources said. The Revenue department has already issued a circular to all sub-registrar offices to apply the revised rate from December 12.

BIG RELIEF

*BBMP not to apply revised building rates for property tax under CVS for three years
* Old building rates will be applicable
* CVS to completely come into effect from April 2008
*But the revision has already been applied for stamp duty