Vijayawada: Minister for Municipal Administration, Botsa Satyanarayana, condemned the reports published by a section of media, on property tax reforms and said revised method of property tax fixation is to make urban local bodies financially self-sufficient without burdening the public.
It may be recalled that the municipal administration and the urban development department has issued a GO (No 198) bringing property tax reforms across urban local bodies in the state. The order was issued amending five acts relating to the municipal department to change the system of levying of property tax from annual rental value basis (ARV System) to capital value (CV) system. The property tax will be fixed based on the market value of the asset fixed by the stamps and registration department in a particular area. The tax shall be levied at such percentages of the capital value of lands or buildings or both not be less than 0.10% and not more than 0.50% of the capital value (CV) in the case of residential buildings, and shall not be less than 0.20% and not more than 2.00% of the capital value (CV) in the case of non-residential buildings, which shall be effected from the financial year 2021-2022.
The minister said the state government, under the leadership of Chief Minister Y.S. Jagan Mohan Reddy has taken a decision, after taking suggestions from the Central government, to change the system of levying property tax which will strengthen urban local bodies (ULBs) and provide better services to people. The minister said the property tax, till now, is levied from an annual rental value basis (ARV System) where three months rent is levied as tax per annum. The government has revised the method of tax fixation and to levy tax based on capital value (CV) of the property he said, and added that the new taxation system is already being implemented in Karnataka, Tamilnadu and Maharashtra.
"The chief minister is clear in his intentions not to burden the people with revised taxation system and it is mentioned in the G.O that increased tax shall be limited to 15% of the existing tax," he said. The minister assured that property tax would not be increased more than 10-15 percent and asked people not to believe in false propaganda. The minister said only Rs 50 is levied as property tax for every house with a plinth area below 375 sqft and it is because the property rights will be given only if taxes are paid.
The minister said that the government has decided to levy water tax between Rs 100 and Rs 350 per month for households (domestic) and this rate will be between Rs 30 and Rs 50 per kilolitre for bulk usage (like apartments), and is between Rs 60 and Rs 140 per kilo liter for commercial purposes, and between Rs 40 and Rs 80 per kilolitre for industrial users. The minister said the revised taxes are only to cover the ONM costs of the supply of water but not for additional income to the municipalities and added that the hike would be 15%.
The minister also explained in detail the new sewerage taxes and said they are nominal and it wouldn't burden the people. The minister reiterated that the revenue of the municipalities would be spent on development works of the same municipality only.