July 27: The cash-starved Greater Hyderabad Municipal Corporation (GHMC) has proposed to levy and collect three years worth property tax in advance from citizens constructing new houses or buildings in the city. The property tax for three years will be calculated based on the status of the land. If the construction is being taken up on a vacant or open land, the officials will calculate the vacant land tax, that is 0.5 per cent of the latest land registration cost and levy the same for three years.

Likewise, if an old bungalow, house or building is being demolished and a new one is being constructed in its place, officials will calculate the property tax that was being collected on the old building and collect the same for three years in advance.

The property tax will be collected in advance when builders come to the municipal office for building sanction plans.

Unless the tax is paid, the plan will not be sanctioned. The GHMC officials defended their advance tax proposal by stating that the validity of building permissions given by the civic body was for three years.

During these three years, the builder neither pays the vacant land tax nor property tax on old buildings being replaced by new structures, thus resulting in huge losses to the civic body.

“In fact, this advance tax system should have been adopted and implemented long back. The GHMC has incurred losses of crores of rupees. Every year nearly 50,000 permissions for construction of buildings including individual houses and flats are sanctioned and as a result the corporation has been losing crores in the form of taxes,” GHMC additional commissioner (finance/revenue), Mr Hari Krishna said.

If a builder completes the construction of a building in less than three years, then the property tax paid by him in advance will be adjusted with payments to be made after the three-year period.