GHMC proposes 30% hike in property tax

The Deccan Chronicle  19.08.2010

Hyderabad, Aug. 18: The Greater Hyderabad Municipal Corporation has proposed a 30 per cent hike in property tax from the next financial year (2011-2012) and a five per cent increase every year thereafter.

Thus, if a house owner is currently paying Rs 10,000 as property tax, he/she will have to pay Rs 13,000 if the hike comes into effect. The corporation proposes to raise an additional Rs 100-150 crore per year with the hike. The civic body collected Rs 470 crore property tax for the year 2009-2010.

The proposal, however, has to be first cleared by the standing committee comprising 15 corporators led by the mayor as its chairperson. It will then be placed before the GHMC general body meeting of 150 corporators. Subsequently, the GHMC will seek a final approval from government to affect a hike keeping in view the political impact it could have, though the GHMC Act enables it to hike the tax on its own.

Officials say that taxes for residential buildings in the core city (i.e. the old MCH area) have not been increased for nearly 20 years while the tax in the surrounding 12 municipalities, which are now part of Greater Hyderabad, was revised in 2002. Property tax was increased for commercial buildings in 2007 but the government had imposed a cap of not hiking beyond 50 per cent.

Many house owners are paying taxes that are less than 20 per cent of their annual rental value whereas GHMC is supposed to get over 33 per cent of the annual rental value, officials said.

The GHMC additional commissioner (finance/revenue), Mr S. Hari Krishna, said the per capita property tax in Hyderabad is less than Rs 400 as compared to over Rs 800 per capita property tax of Bengaluru, Ahmedabad and Surat among other cities.When contacted, the mayor, Ms Kartika Reddy, who chaired the standing committee meeting, said the “tax issue” had been deferred to the next meeting.