Property tax: Govt to notify rules soon

Property tax: Govt to notify rules soon
DH News Service, Bangalore:
The State Government is expected to come out with rules for re-introduction self assessment system to collect property tax in BBMP limits, in a couple of days.


According to a senior officer in the Palike, the draft rules for collection of tax have been framed. The draft has been forwarded to the Department of Law for its scrutiny.

The government decided to bring back SAS after severe protests against introduction of the capital value system. Governor Rameshwar Thakur promulgated an ordinance amending the Karnataka Municipal Corporations Act (1976) to this effect, on October 25.

The ordinance introduces a ‘unit area value’ in place of rental value, as was mentioned in earlier version of SAS. The unit area value has been defined as ‘An average rate of expected returns from the property per sq ft, per month, determined by the Palike commissioner on the basis of the average market rate, determined through mass appraisal method or real estate market information or any other reliable source.’

More clarity

The officer said ‘rental value’ has been replaced by ‘rate of expected returns’ to offer more clarity. Rental value suggests only rent earned by property owner. However, the word ‘returns’ refers to rent, lease agreement, and hypothecation as well. As assured by the government, upward revision of tax rate will not exceed 20 per cent of the rates existing in 2001, when SAS was first introduced.

Public can submit their objections, if any, after the draft rules are officially notified.

The government will make a final notification of the rules after verifying the objections filed. The Palike is expected to start collecting the tax by the beginning of December this year.

‘No legal sanctity’

Former mayor P R Ramesh argues that the government’s decision to collect property tax under SAS does not hold legal sanctity, as there is no elected body in the Palike.

“The ordinance clearly says that the tax can be collected based on a resolution passed in accordance with section 106 of the KMC Act. The section 106 says that resolution should be passed in a general meeting. But there is no elected body to hold a general meeting,” he said.