No property tax for small apartments

The state legislative council on Thursday approved the bill to calculate property tax on capital value instead of rateable value in Mumbai.

The amendment to the Bombay Municipal Corporation Act, 1888, had been pending in the council after it was approved by a joint select committee and the state
assembly.

The decision will benefit residents of flats which have a carpet area of up to 500 square feet.  Under the new system, these flats are exempt from property tax for the first five years. For the next five, there is a cap of 8% on annual increases.

The rateable value refers to the rent a property is likely to fetch. Currently, property tax on old buildings in the island city is a pittance though capital values are very high. That is because rents in South Mumbai,  especially in older buildings, have been frozen at 1940 levels.