New property tax system of BMC, is gain for Chembur and Andheri

Now residents of Chembur and Andheri East can look forward because of revised property tax system of the BMC (Brihanmumbai Municipal Corporation). Some other localities in Mumbai such as; Goregaon East, Malad West, Andheri West and Kandivali East are in the other areas, which are getting benefit because of revised property tax system. Availability of large size properties in Mumbai will keep the profits towards lower end. Earlier, BMC was cleared the new property tax system in 2013, all the housing societies in all over the Mumbai, recently received the revised property tax system, which is appears to be paid for the year 2010 to 2013. According to new tax guidelines, now property tax will be calculates on the property’s capital value, rather than the rental value of the property.

The area’s which have low plot value and high rental value will get the benefit because of new tax system. Properties in Chembur and Andheri East hold high rental value and low property value and here the built-up area is less in comparison of other areas of the western localities, so these areas will get the benefit. But it can vary from property to property because tax system consider several other factors such as; the age of construction. According to recent reports and data the capital value of properties in Andheri East region range from Rs 12,000 to 19,000 per sq ft, while the premium areas such as; in western area the value of property range from Rs 20,000 to 40,000 per sq ft, and in Chembur property rates are in the range of Rs 14,000 to 19,000 per sq ft. Whereas the rental value of these localities ranges Rs 35, 000 to 55, 000 per sq ft. Local realtors are not so happy with the new form of property tax as it depends on Area, Age, Price and type of property. These factors play an important role in assessing the cost of land.

Formula for property tax calculation:

Capital value = Built-up area* Base value *Type of building* Age factor* Use category* Floor factor

Chembur and Andheri are one of the well established localities of Mumbai, where one can find the building in different age cycle. Andheri West is a prominent residential location, whereas eastern part has some of the old residential and commercial buildings, which has age more than 30 years. Hence, in these areas there will be mixed impact and property tax will be measurable on case to case basis.

In case of re-developed properties, there will be flip side because of increased base value and change in the built-up area. The other positive feature for these localities is the size of residential and commercial units. According to recent reports, approximately 30 per cent properties in these areas have an average size of 300-500 sq ft, it stands for 1BHk and according to old tax system BMC has decided to levy taxes.