The government of Karnataka has amended the Karnataka Municipal Corporations Act by a gazette notification dated 28-4-12. It prepares the ground for increasing the property tax in cities including Mysore. It is surprising that this amendment has drawn little attention in general.
Before the amendment, the maximum rate of property tax that could be levied by Mysore City Corporation on commercial properties was 2% of the total capital value of the property. The amendment increases it to 3% (an increase of 50%). Similarly, the amendment increases the maximum rate of property tax on vacant land less than 1000 sq. m in area from 0.2% to 0.5% (an increase of 250%), vacant land between 1000 sq.m. and 4000 sq.m. in area from 0.05% to 0.1% (an increase of 100%) and vacant land larger than 4000 sq.m. in area from 0.02% to 0.1% (an increase of 500%). There is no change in the property tax rates for sites on which residential and industrial buildings exist.
The law prescribes both the minimum rate and the maximum rate at which property tax can be levied and the City Corporations can opt for any rate between these limits, but it is the historical fact that the Corporations always choose the highest rate allowed to maximize their revenue. Since the allowed maximum rates have been increased, it is almost guaranteed that the Corporations including MCC will increase their property tax rates soon to take advantage of the amendment. Therefore, owners of commercial properties and vacant sites can expect to pay a much higher property tax from 2013-14.
The gazette notification also permits City Corporations to exempt 50% of the property tax for ex-servicemen and families of deceased servicemen (but MCC has not yet passed any resolution in this matter). It also mandates rainwater harvesting for all existing buildings built on a site larger than 2400 sq.ft. and on all proposed buildings on sites larger than 1200 sq.ft. This condition can be easily enforced on future buildings through building licences, but it is not clear how it can be enforced on existing buildings. It is also surprising that using non-metric units has been prohibited by law since 1962, but the amendment still speaks of sq.ft.
B.S. Vanishree, Mysore Grahakara Parishat
Before the amendment, the maximum rate of property tax that could be levied by Mysore City Corporation on commercial properties was 2% of the total capital value of the property. The amendment increases it to 3% (an increase of 50%). Similarly, the amendment increases the maximum rate of property tax on vacant land less than 1000 sq. m in area from 0.2% to 0.5% (an increase of 250%), vacant land between 1000 sq.m. and 4000 sq.m. in area from 0.05% to 0.1% (an increase of 100%) and vacant land larger than 4000 sq.m. in area from 0.02% to 0.1% (an increase of 500%). There is no change in the property tax rates for sites on which residential and industrial buildings exist.
The law prescribes both the minimum rate and the maximum rate at which property tax can be levied and the City Corporations can opt for any rate between these limits, but it is the historical fact that the Corporations always choose the highest rate allowed to maximize their revenue. Since the allowed maximum rates have been increased, it is almost guaranteed that the Corporations including MCC will increase their property tax rates soon to take advantage of the amendment. Therefore, owners of commercial properties and vacant sites can expect to pay a much higher property tax from 2013-14.
The gazette notification also permits City Corporations to exempt 50% of the property tax for ex-servicemen and families of deceased servicemen (but MCC has not yet passed any resolution in this matter). It also mandates rainwater harvesting for all existing buildings built on a site larger than 2400 sq.ft. and on all proposed buildings on sites larger than 1200 sq.ft. This condition can be easily enforced on future buildings through building licences, but it is not clear how it can be enforced on existing buildings. It is also surprising that using non-metric units has been prohibited by law since 1962, but the amendment still speaks of sq.ft.
B.S. Vanishree, Mysore Grahakara Parishat