Social Media caption – Finding it tough to understand property tax? Here is a quick and easy fact sheet to help you out!
Property tax is a term that often confuses residents due to its complex calculation mechanism and the variable rate of implementation at different locations. In most parts of the world, such a tax is applicable on all occupied properties for residential and commercial purposes. This tax acts as a revenue mechanism for local authorities to function smoothly.
Still finding it hard to deal with it? Worry not! Here is a quick run down of Property tax and how it affects you.
Property Tax is a tax levied on your house, office, workshop, factory or place of accommodation by the local civic authorities to raise revenue for maintenance of public infrastructure and provide general facilities.
Municipality Committee or a similar organisation is usually in-charge of these activities and collects funds from residents. Property tax is subjective of location. A typical city like Delhi can have as much as 8 different zones, for each, the value of property tax is calculated separately.
Factors affecting property tax are directly related to the system of calculation of property tax. There are three types of methods, as mentioned below:
Annual Rental Value – Calculated by the annual rental value approximation of a property and depends upon locality
Capital Value System – Market value of the property is calculated, upon which some percentage of tax is levied
Unit Area System – Calculated according to the units of area a property occupies
There are several further sub-factors such as plinth area, maintenance and repairs of building, annual rental value etc, that affects the total amount.
Property tax can be paid online at the city’s Municipal Corporation website, for instance, MC website for Mohali (Punjab) is http://mcmohali.org/.
Certain other facilities Mobikwik also allow payments of property tax online. Apart from this, property tax can also be paid at MC office and designated payment institutions.
Although they sound very similar, property tax and property income tax are poles apart.
Both of the taxes are calculated in different ways and should not be confused by each other. This article particularly focuses on Property Tax.
There are several rebates available for taxpayers as issued by the government.
For instance MCD offers a 15 percent rebate if the total annual tax amount is paid in one single go in the first 3 months of the year as a lump sum amount.
Senior Citizens, Women and handicapped are also eligible for a 30 percent rebate on the annual amount of the property tax.
The conditions operating these rebates are determined by local authorities of the state and they can vary from state to state; locality to locality.
A penalty of 1-2% per month is implied on the occasion of late payment of tax. On an average this can be an additional cost of 100 to 500 INR which must be avoided by residents.
This was a quick roundup of property tax but if you need more information on it or a personalized advice on property related matters, contact Spacio Realtors today! We are Mumbai’s leading brokerage firm.
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