Property tax spike kills joy of moving into bigger homes

The joy of moving into bigger flats in redeveloped MHADA buildings was short lived for residents of Shastri Nagar in Goregaon. The first of the property bills was a shocker for most residents of the colony’s 26 buildings.

Property tax was levied at a rate of Rs6 per square foot, a 50-fold increase from the 13 paise paid by residents earlier. This could well be the fate of thousands of families living in MHADA buildings across the city once they move into plush homes in redeveloped societies.

BMC officials said there was no provision for a special rebate for MHADA buildings. They said MHADA structures are treated on a par with private societies when it comes to tax calculation.

“However, residents may get some relief when the BMC’s new property tax system kicks in later this year. Tax rates across the city will be rationalised,” said an official attached to BMC’s Motilal Nagar ward office. “The new rates will be with retrospective effect from April 2010.”

Shastri Nagar residents said the BMC’s policy of treating MHADA buildings like private societies was unfair.   

Jayaprakash Menon, a resident of Shiv Shakti Society, told DNA: “Most of the erstwhile tenants are either retired or on the verge of retirement. The steep property tax rates are difficult to pay.”

He added that the dilapidated buildings, built by MHADA in 1966, were declared dangerous and so residents had no choice but to opt for redevelopment. “Neither did the BMC ask for a list of old tenants nor did it extend a 20% rebate that they are eligible for,” he said.

Some residents alleged that the civic officials had slapped ad hoc rates on new buildings and there were discrepancies in their calculations. “Different societies in the same locality have been charged different rates despite the occupation year being the same,” said RS Ambekar, an irate resident. He said that since residents used to deposit property tax dues with MHADA, they were at sea when it came to the intricacies of paying such taxes.

Realty experts believe this is just the beginning of woes for residents living in low-income group housing tenements. “The property tax is just the tip of the iceberg. The monthly maintenance which used to be Rs200 earlier runs into thousands (Rs4 per sq ft) after redevelopment,” explained realty consultant RA Shukla. He said that though developers cushion the blow by offering a corpus to old tenants, it is rarely earmarked for payouts.