The Bruhat Bengaluru Mahanagara Palike (BBMP) has put forth a draft notification proposing a radical shift in the property tax assessment method for Bengaluru. The proposed changes, following the recent passage of the BBMP Bill, 2024 by the Legislative Assembly, could have far-reaching implications for both residential and commercial property owners in the city.
The current property tax assessment in Bengaluru relies on the Unit Area Value and a zonal classification system (‘A’ to ‘E’), in place since 2004. However, under the proposed method, the tax would be determined based on the actual value of the property, doing away with the existing zonal classification system. This move aims to simplify the tax assessment process, aligning with the objectives outlined in the recently approved BBMP Bill.
The BBMP Bill, 2024, which received legislative approval on Tuesday, primarily seeks to reduce property tax penalties by 50% within Bengaluru city limits. This legislative change paves the way for the proposed adjustment in the property tax assessment method.
One of the potential consequences of this shift is the anticipated increase in property tax values, which could subsequently lead to a rise in rents for both residential and commercial tenants. The BBMP intends to set taxes based on the guidance values of properties, with varying rates for different property types, including residential, commercial, industrial, and others.
The elimination of the zonal classification system is expected to simplify the process but has raised concerns among property owners, particularly those with holdings in prime locations like Sadashivanagar and MG Road. If the proposed property tax system is implemented, these property owners may find themselves paying higher taxes than the current rates.
To ensure a fair representation of stakeholders’ perspectives, the BBMP has called upon citizens to submit objections or suggestions regarding these proposed changes within the next 15 days. This open consultation period is a crucial opportunity for property owners and tenants to contribute to the decision-making process.
As Bengaluru navigates these potential changes in its property tax landscape, both property owners and tenants are urged to stay informed and actively engage in the ongoing consultation process initiated by the BBMP. The outcome of these deliberations could significantly shape the future dynamics of property taxes and rentals in the city. Stay tuned for further updates as this story develops.