With the 2000 rates of SAS in force coupled with more flexibility in building depreciation, owners of old properties have
much to cheer about when paying their property tax.

As per the BBMP's estimation, nearly 65% of old properties will actually end up paying 15% to 18% less in property tax compared to what they paid in 2000.

How does this work? The catch here is, while the rates have remained the same as in 2000, the new rules have increased the depreciation. Earlier, the depreciation would start from five years and the maximum bandwidth was 55 years and above. Under the new rules, depreciation can be calculated from the third year and go beyond 60 years.

While this move will see a drastic dip in the revenue from property tax, BBMP officials feel that more residents will end up paying taxes thanks to the reduced rates and consequently, more properties will come under the tax net. "The provision for the BBMP to collect taxes from unauthorised properties and also the removal of the 2.5-times cap will help fill in the coffers," say officials.

Instead of the 6.5 lakh properties that were yielding revenue, the BBMP will now look at 14 lakh properties that come under Greater Bangalore. The existing A to F zones will remain the same, but hoardings and other new categories of non-residential structures will be taxed.

The cabinet has also reduced the number of properties coming under random scrutiny -- from 15% that was suggested by the BBMP to 10%.

The revised depreciation rates in the final rules notified by the government also suggests an increase to 70% (earlier 50% in the draft rules). Four new slabs have also been inserted into the revised depreciation table for properties that are 48 to 60 years old.
Source:Times of India, 22nd January 2009