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Kalyan Dombivli Municipal Corporation reduces open land tax by 6.54 per cent

The two-year-long struggle of DK (Dombivli Kalyan) realtors has finally borne results just ahead of the festive season.

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The reduction of open land tax by Kalyan Dombivli Municipal Corporation to 3.46 per cent from 10 per cent has got realtors in the Dombivli Kalyan region excited. Realtors say this will ease their burden of cost and will also bring down property rates by Rs 100 to Rs 200 per square feet.

The two-year-long struggle of DK (Dombivli Kalyan) realtors has finally borne results just ahead of the festive season. The KDMC reduced the exorbitant open land tax (OLT) the realtors were subjected to. 

"The new OLT at 3.46 per cent is applicable from March 2018," says Vinay Kulkarni, assessor and collector, tax department, KDMC. The proposal for OLT reduction was passed by the KDMC general body on September 10.

This news have made the builders and developers in DK happy as they have been reeling under heavy OLT for past six to seven years. "Everywhere else OLT is 1.5 percent to 6.5 per cent of the property value. But it was 10 per cent in Dombivli Kalyan," says Shrikant Shitole, president, MCHI (Maharashtra chamber of housing industry)-DK. "We are happy that the OLT has gone down and I am sure many developers will come forward to pay the arrears they owed to KDMC," he adds.

As per sources the realtors owe KDMC Rs 150 crores as dues and refrained from paying due to high OLT. "But with the burden of 10 % OLT gone, people will start paying up and will be a source of income to KDMC as well," he adds.

They also say that this will also lead to some movement in the stagnant realty market in the region. "We will be in a positive spirit to give discounts to customers during festive sales," he adds.

Praful Jha, ex-president of MCHI-DK says that this will also affect property rates. "Expect the customers to benefit as the rate of property will go down by Rs 100 to Rs 200 per square feet," says Shah. The property rate in Kalyan is Rs 5,000/square feet on an average.

However, activist Shrinivas Ghanekar from Kalyan who had sent a legal notice to KDMC terming the OLT reduction illegal early this month says this will be a loss of revenue for the civic body. "KDMC will lose Rs 600 crore as revenue due to OLT reduction," says Ghanekar.

He has also written to the chief minister Devendra Fadnavis to make the developers pay the arrears and also roll back the 'illegal OLT.' "In an RTI the civic body told me that while there is a provision in the Maharashtra Municipal corporation act 1949 to increase the tax, there is no provision to reduce it. When OLT is a kind of tax, how can they reduce it without a provision for the same?" he asks. Ghanekar have also warned of going to court if the tax is not rolled back.

SHARP DECREASE

  • KDMC reduced open land tax to 3.46 per cent from 10 per cent 
     
  • Realtors say that the welcome move will lead to some movement in the stagnant realty market of the region 
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