BENGALURU: Despite the economic hardship caused by the pandemic, residents and industries in rural and semiurban areas may have to pay more tax. The departments of rural development & panchayat raj (RDPR), urban development and municipal administration plan to impose higher property tax rates and user charges for basic amenities.
To help gram panchayats (GP) get adequate resources, the RDPR department has backed the proposal for revising property tax rates and bringing unsurveyed properties into the tax net. The government also has plans for metered water supply at households in villages, while efforts are on to provide them with tap connection.
“GPs hardly get about Rs 1 crore in the form of annual grants, which is not enough for them to ensure infrastructure development and good administration. To make them self-reliant, we are proposing to empower them to fix property rates, which can be revised periodically. Also, they will be able to impose user charges for amenities like water supply,” said RDPR minister KS Eswarappa.
According to the Centre’s guidelines, local bodies should notify floor rates of property tax in consonance with the guidance value of properties and increase them once in four years. The same rule is applicable to user charges for providing water, drainage and sewage facilities.
By complying with these guidelines, Karnataka will be eligible for additional borrowing of 0.25 per cent of the gross state domestic product (GSDP). The state is entitled to borrow 1 per cent of GSDP for rolling out these reforms, apart from a periodic hike in power tariff.
RDPR commissioner Priyanka Mary Francis said that the proposals were still in the discussion stage and property tax with revised rates was being collected on an experimental basis in select GPs in districts such as Belagavi, Kalaburagi, Shivamogga and Dakshina Kannada.
The rates will be officially extended to all GPs only after studying the outcome. During the budget session, the assembly passed an amendment to the Karnataka Municipal Corporation Act, 1976, to tweak property tax rate in the purview of urban local bodies (ULB). Previously, residential and noncommercial buildings were taxed between 0.3 per cent and 1 per cent of the guidance value. The amendment seeks to change it to 0.5 per cent and 1.5 per cent.
Hitherto, 50 per cent of the guidance value of property was considered capital value for tax calculation. It will be changed to 25 per cent of the guidance value. The amendment also envisages tax for vacant sites that are over 1,000sqft.
