Every property is an asset which is taxable and one has to pay taxes related to it annually. So we can say that a property tax is an annual amount paid by a property or landowner to the government. However, this tax could be paid either to the local state government or Municipal Corporation, depending on government policies.
In today’s time with the help of the digital medium, paying property tax has become a hassle-free work. So continuing our series in which we are giving information about the procedure to calculate and pay property tax, today we are guiding on the property tax on Mumbai.
Residential properties owners in Mumbai have to pay property tax annually to Brihanmumbai Municipal Corporation (BMC). However, BMC uses the Capital Value System (CVS) to calculate property tax which is based on the market value of the property.
Calculation of CVS – Market value of the property x Total carpet area x Weight for construction type x Weight for the age of the building
- Market value of the property can be calculated by using Ready Reckoner. It is set by the State Government and is a compilation of the fair value prices for properties. However, it varies by zones and ward.
- Weights for construction types also vary as per different residential units. For example, for Bungalows and RCC construction, it is 1 unit. For chawls, it is 0.60 units and for Under-construction or vacant land, it is 0.50 units.
- Also, weights for the age of building depend upon the construction time of the property. Like, Properties which were constructed before 1945- it is 0.80 units; Properties constructed between 1945 and 1985, it is 0.90 units and Properties constructed after 1985- it is 1 unit.
Once the CVS is calculated, property tax can easily be found out by simple calculation, which is as follows:
Capital value of property x Current property tax rate (%) x Weight for user category
- Weights for ‘user category’ also vary as per units. For example: for hotels and Businesses, it is 4 units; For Commercial properties (shops, offices), it is 3 units, for Industries and factories, it is 2 units and for Residential and charitable institutions, it is 1 unit.
Modes of payment of property tax
In Mumbai, one can pay their property tax either at BMC help centers or office of Assistant Revenue Officer or citizen felicitation center. However, the best way which people find easier is through the online portal of Municipal Corporation of Greater Mumbai or Navi Mumbai. One can go to the web portal of Municipal Corporation and select payment method. Currently, only net banking mode is available on the website. After selecting this, submit your property ID under which the amount of your property tax will be shown on the screen. Once you have paid, take the receipt of tax payment. Ensure there must be no errors; if there is any then correct them instantaneously.