Tax rate for vacant sites will double; for individual residences it will rise marginally. 

The new system is applicable for all new and un-assessed properties with immediate effect.

Unlike in other parts of State, CVS implementation was delayed in Bangalore.

With the Bruhat Bangalore Mahanagara Palike () all set to introduce the Capital Based value System (CVS) of property tax collection from April, apartment owners in the city will stand to gain as their tax rates will slightly reduce. The rate for vacant sites will double and that for individual residences it will rise marginally.

This is because under CVS, the tax is calculated on the basis of the capital value and the current year guidance value (i.e. of 2007) of the building.

This means the total cost of land on which a high-rise building is located will be divided by the number of flats thereby slightly reducing the rate depending on the guidance value of the area.

As per the resolution approved by BBMP Administrator Dilip Rau on Thursday, the civic body has fixed the rate of tax for self-occupied and residential buildings at 0.25 per cent and 0.5 per cent of the capital value respectively.

The rate for industrial and commercial properties will be one per cent and two per cent of the capital value respectively. For vacant sites, it has been fixed at 0.2 per cent, which might work out to double the amount that the owners are paying now.

‘Incentive’

BBMP Commissioner S. Subramanya told The Hindu that under the new system there was an incentive for “going vertical” and “constructing on vacant land.” The new system would only make a slight change in the rates for property owners, who were paying under the existing Self Assessment Scheme (SAS) of property tax based on the annual rental value (ARV) of a building. It would definitely affect people, who were either under-paying or were evading tax so far, he said.

The new system would be applicable for all new and un-assessed properties with immediate effect.

They would have to pay tax after three months of the resolution being notified. Those who pay within a month of the notification would get a five per cent rebate, BBMP Additional Commissioner (Finance) Sandeep Dash said.

Though the State Government had amended the Karnataka Municipal Corporations Act in 2004 to enable the urban local bodies to collect tax through CVS, it was implemented all over the State, except Bangalore. This was because the officials had urged the Government to fix separate rates for Bangalore as the land value here was high.

The BMP Council, which ended its term in November, did not approve the resolution, further delaying its implementation.

“We had no other go but to get it approved by the Administrator. The new system will also bring in a uniform mode of taxation in the old and new areas of the erstwhile seven city municipal councils and one Town Municipal Council,” the commissioner said.
Source: The Hindu
Related News: BBMP Introduces CVS for new properties in Bangalore