Property tax: Citizens in a blind alley

Property tax: Citizens in a blind alley
By Satish Shile, DH News Service, Bangalore:
The temporary suspension of collection of property tax, has compounded the woes of Bangaloreans even as the BBMP has lightened the burden by withdrawing 10 per cent education cess on it...


All work on khata registration and sanctio-ning of building plans has ground to a halt as payment of property tax for the current year is mandatory to apply for these services.

In effect, there has been a proliferation of illegal constructions. Former mayor P R Ramesh alleged: “Palike staff are making money by turning a blind eye to unauthorised constructions.”

According to D V Raghu of Chowdeshwari Builders and Developers, “Banks do not offer loans for construction works if the applicant does not produce proof of property tax paid. Many builders have stopped taking up fresh constructions because of these problems.”

The Palike, in the absence of an elected body, had decided to introduce Capital Value System to collect property tax in place of the annual rental value system, from 2008-09.

But the move sparked off widespread opposition, following which the gover-nor directed the Palike to suspend the collection of property tax till a popular government came to power.

Education cess

In a recent notification the BBMP withdrew the 10 per cent education cess on property tax with effect from April 1, 2008.

With this, the total cess on property tax will be 24 per cent: health (15 per cent), library (6 per cent) and beggary (3 per cent).

However, this relief may be temporary as the Palike has plans to introduce storm water drain cess (10 per cent). A Palike proposal in this regard is pending with the government.

BBMP Special Commissioner (Finance) Sandeep Dash said the Palike would have collected property tax to the tune of Rs 200 crore in the last two months. He hoped the new government would take a decision soon and allow the Palike to collect property tax.