The State government has issued a GO promulgating an ordinance to change the system of levying property tax from annual rental value basis (ARV system) to capital value (CV) system. The government, in the GO 198 dated Tuesday, issued the ‘Rules for levy and assessment of property tax’. The government will levy the property tax (PT) based on the CV of the property.
As per the GO, the capital value of lands and buildings fixed by the Stamps and Registration Department for the purpose of Registration will be deemed to be the guideline value for fixation of property tax for which, zones and localities together with their boundaries; classification of the building; usage of the building; age of the building; plinth area; and door number (or) digital door number (or) unique Property Identification Number (PTIN) will be taken into consideration in determining the capital value.
The PT will be fixed at such percentages of the capital value of lands or buildings or both as may be fixed by the municipal council/ corporation as the case may be. “The percentage of the property tax so fixed, shall 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% of the capital value (CV) in the case of non-residential buildings, which shall be effected from the Financial Year 2021-2022,” the GO said.
The Vacant Land Tax shall be levied at 0.20% of the estimated guideline value of the land in case of municipalities and 0.50 % in case of municipal corporations. In the case the vacant lands where garbage is being dumped and unhygienic conditions are prevailing a penalty of 0.10% of the guideline value in case of municipalities and 0.25% in case of municipal corporations will be levied till the garbage is lifted and unhygienic conditions eases.
Move draws flak
Meanwhile, the Communist Party of India - Marxist (CPI-M) State leader and Andhra Pradesh Pattana Poura Samakhya convener Ch. Babu Rao took objection to the ordinance. He wondered how the government can issue the ordinance when the elected local bodies were not there. The Central government under the garb of Atma Nirbhar and offering loans to the States was pushing the reforms. It would be burdensome to the people, who were already reeling under crisis due to the COVID, if the property taxes were to be collected based on the new system, he said adding, the burden would be about ₹10,000 crore per annum.
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