The Hindu         15.03.2011

‘Revision of guidance value will not push up property tax'

Local bodies can increase property tax only once in three years

The Mysore Grahakara Parishat (MGP) has said that the Government's proposed move to revise the guidance value of properties may not lead to a further increase in property tax.

The Karnataka Commissioner of Stamps and Inspector-General of Registration recently announced that revision of guidance value of properties was under way. According to the commissioner, there was a huge gap between the market value — land value and building value — of properties and the guidance value in major cities, and the Government wanted to set this right.

Speculation

Speculation was rife among citizens and non-governmental organisations that an upward revision in the guidance value would lead to increase in property tax, P.M. Bhat of the MGP said in a press release.

However, he pointed out that a hike in the guidance valueof existing urban properties would not lead to increase in property tax. Citing Section 109A of the Karnataka Municipal Corporations Act, 1976, which deals with revision in property tax, Mr. Bhat said the law clearly stated that the property tax assessed and levied under different provisions shall not be assessed each year but shall be enhanced by 15 per cent once in three years, from the financial year 2005-06.

Mr. Bhat said the local bodies might increase property tax up to 15 per cent once in three years and this might vary for different buildings.

“Property tax goes up by 15 per cent every three years and it cannot be increased further just by increasing the guidance value,” Mr. Bhat.