Property Tax In Mumbai

The city of Mumbai is the financial capital of India. It is here in this city that people from all over the country arrive to make a fortune for themselves. This is the land of Bollywood, Dalal Street, or many a big business house. Hence, the value of a property here in Mumbai is bound to be high. In fact, Mumbai property prices are the highest in the country. Now if you do own property in the city of Mumbai you need to be educated about the tax structure on properties here in the city of Mumbai.

The tax structure on properties here in Mumbai is based on the Mumbai provincial municipal corporation act of 1949. Here you are charged taxes on any property you own in Mumbai. The only exception being are burial grounds, or land used for public worships or land used for charity. Earlier there were many discrepancies in the tax structure here in Mumbai. The city of Mumbai is divides into two broad categories. The first is the Island city and the next are the suburbs. The tax structure is different for the island city and the suburbs. Let us now have a look at how the property tax in the city of Mumbai is calculated.

Mumbai just like any other Indian city is divided into various wards. Now if you are an owner of a property in Mumbai you need to pay taxes annually. The tax, which you need to pay, depends upon various factors such as the exact location of the property, size of the property , age of the building, if there are any tenants or not. The city of Mumbai pays the highest amount of taxes in the country. This is exactly one of the reasons so as to why the Brihanmumbai Mumbai municipal corporation is one of the richest bodies in our country. The BMC will also grant you concessions if you do pay your taxes on time. The tax structure of this city is in for a change. Earlier the tax structure was based on the rateable value system. Here under this system the value of a property is based on the amount of money it will end up earning as rent. The owner had to pay taxes based on it.

It will soon change and will be based on the capital value system. Under this system, the tax on your property will be calculated on the value of your property. You will have to pay a certain percentage of the value of your property as tax. Life for property owners in the city of Mumbai is bound to be tough after this. You must all realize that property prices in the city of Mumbai are the highest in the country. Other than being the financial capital of the country, the city is an island. Thus, it has no place to expand. Therefore, consistent demand is always moving the property prices in the city northwards.

Property tax is a complicated matter. The liability to pay the tax is on the owner of the property. Under the BMC system the taxes on the property becomes due twice a year. The first time tax is charged on the property is on the 1st of April. The second installment is due on the on the 1st of October.

While the BMC may give you concessions if you do pay on time, things can get bad if you are a defaulter. The BMC issues a demand notice to the owner of the property. Now if you do still tend to ignore the summon then a warrant is issued and the property will be sealed. Therefore, please do act before you are forced to arrive at such a situation.

Now it may so happen that you may be interested in transferring the property you own to your son or your heir. In this case, while, you do the legal transfers through the courts you will also have to inform the BMC in writing. Otherwise, the tax receipts will still be generated in your name and you will be liable to pay taxes.

If you happen to construct a new building in the city of Mumbai, you must make sure that you obtain all the necessary clearance from the BMC. Do not even think of adding more floors to your building than sanctioned by the corporation as they may term it illegal. Owning an illegal building can create a big hole in your pocket, as the tax charged for it is double. The additional money, which is charged, is a penalty for not following the corporation guidelines.

There are times when you feel that you have been told to pay excess amount as property tax. Ascertaining the correct value of your tax is indeed a complicated matter as discussed earlier. Property taxes for Lokhanwada cannot be the same as of Chembur. Another big factor, which is taken into account, is the condition of your home. Do the floors of your home have marble or mosaic? These are small factors, which are taken into account when deciding the property tax. Therefore, if you do feel that you are being asked to pay more you can always consult property tax consultants for their advice. These professional people have a through knowledge about property tax structure in the city of Mumbai. They can make property tax appeals on your behalf. Further, they can represent you in a court of law regarding property tax related matters.

Paying property tax can be a costly matter in the city of Mumbai. Things can become even worse if properties are being valued at the capital value system. It will surely burn a hole in your pocket if you have to pay it at one go. Banks have come up with a unique idea of giving property tax loans. You can avail this and clear of your property tax. Now just like any other loan you can repay this money via installments. Thus, there is no reason for you to be a tax defaulter in the city of Mumbai. You must pay your taxes as it is being utilized for the up keeping of the infrastructure in the city of Mumbai.