The Times of India                   27.02.2013

Illegal structure owners to be hit hard

HYDERABAD: The owners of unauthorised structures/floors will soon have to cough up more property tax. The Greater Hyderabad Municipal Corporation
(GHMC) has decided to collect 100% more on normal property tax as
penalty on new illegal constructions as against the existing 25% being
levied by the civic body.

The GHMC is likely to implement the
new penalty rule from April 1, 2013. Incidentally, owners of over three
lakh properties of the 12 lakh assessed by the corporation might have to
pay the additional property tax. “If normal tax is Rs 1,000, the owner
of unauthorised construction will have to pay Rs 2,000 towards property
tax. The new tax rule will be applicable to all types of buildings like
individual houses, flats, encroachments on government land and assigned
land,” GHMC sources said. With the new rule, the corporation is expected
to get Rs 30 crore additional revenue.

“We are taking all
efforts to get section 220B of the Greater Hyderabad Municipal
Corporation Act amended, where there is a clause on imposing 25% penalty
till such illegal structures either demolished or regularised. The
amendment to the Act to collect 100% more tax will be made soon,” GHMC
commissioner MT Krishna Babu told TOI on Tuesday.

The officials
said the idea behind the proposal of enhancing penalty on illegal
constructions was to deter property owners from raising unauthorised
structures. Originally, the provision for collection of 100% additional
tax on illegal constructions was incorporated in the New Building Rules
(GO 86) issued in 2006. However, the GHMC has been collecting only 25%
more tax on illegal buildings as per the Act.

“Since, there is contradiction between the Building Rules GO and GHMC Act, it can be challenged in the courts. Now, the municipal administration and urban development (MA&UD) department has decided to amend the Act,” a GHMC official said.

Apart from imposing tax on the unauthorised constructions, the chief
minister reportedly cleared the proposal to levy property tax on
squatters of encroached government land or municipal land or any
category of land, which will also attract 100% additional tax. Until
now, illegal constructions on government land were not assessed as there
was ambiguity in the GHMC Act on assessment of the encroached land. The
corporation officials argued that squatters were enjoying civic
amenities and other facilities like other tax payers and the civic body
was losing revenue.

The GHMC officials said the chief minister
would hold a meeting with departments like GHMC, Central Power
Distribution Company Limited, Hyderabad Metropolitan Water Supply and
Sewerage Board (HMWS&SB) and Stamps and Registrations department on
measures to be taken to prevent illegal constructions. Though the
Occupancy Certificate (OC) was made mandatory for providing water and
electricity connections in the New Building Rules, only HMWS&SB was
strictly adhering to the rule and CPDCL officials were not insisting on OC.

Officials said steps would be taken by the state government to make OC
mandatory in various acts, including the one governing CPDCL.