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Bangalore Property Prices To Rise
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The Bruhat Bangalore Mahanagara Palike(BBMP) is planning increase the property taxes by a whopping 20% for residential properties in Bangalore and 25% for commercial properties in Bangalore. BBMP is now under a huge debt as inflation has soared but the property tax rates have remained the same ever since 2008 inspite of dealing with acute cash crunch. The state government now has decided to tackle the situation.
The new property tax rates will be applicable from April 2015. Property tax has been increased after a directive from the State government to the BBMP. The State government has also asked the BBMP to revise the property tax rates every three years. This directive overturns BBMP proposal of raising taxes in five years. With the hike the civic agency will get an additional revenue which will range between Rs 850 crore and Rs 1,000 crore. Money collected through increase in property tax will towards payment of servicing loans and pending contractors' bills.
Increase in property tax in real estate Bangalore is going to pinch the taxpayers' pockets. But the government has tried to soften the blow as according to rules mandate BBMP has to raise taxes by 15% in every three years; If this trend would have followed then the tax rates for real estate Bangalore would have increased by 32.25% as compared to the 2008 level for residential Bangalore real estate buildings. But, the State government has increased tax of Bangalore real estate by only 20%.
The bigger Challenge for the civic agency is increasing the property tax collections. The BBMP has always failed to meet its targets in the last 5 years. The agency for the year 2014-15 had kept an ambitious target of Rs 2,500 crore, but BBMP has collected only Rs 1,120 crore till July end this year. It is estimated that another Rs 500 crore will come in by the end of the financial year. According to the civic agency in the last five years around three lakh property owners have not paid taxes. These owners owe the agency an about Rs 588 crore.
Increase in taxes are not just making taxpayers unhappy but sitting corporators too are feeling uncomfortable after the decision was taken. Many corporators are questioning the timing of the directive as it might influence the BBMP polls. Property taxes in the city were due to for a revision in they year 2011, the council, refused to take such an unpopular decision.
Makaan.com is a well known property site that hosts real estate in India and properties. The property site has a comprehensive list of Bangalore properties and India real estate.
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