G.R. dt. 2nd March, 2023 – Department of Urban Development- Sub- Property Tax Assessment of Urban Local Bodies in Maharashtra
Regarding Procedure for the Levy of Property Tax in the Areas of Urban Local Self-Government Bodies
Government of Maharashtra
Department of Urban Development
Government Resolution No:-FFC-2022/Pra.Kra.126/NaVi-04
Mantralaya, Mumbai-400 032
Dated 2nd March, 2023
1. Letter from the Government of India in the Ministry of Housing and Urban Affairs, bearing No:40(06)PFS/2017-18/Vol. V, Dated 17th May, 2020.
2 D.O. Letter from the Government of India in the Ministry of Housing and Urban Affairs, bearing No:-K-14012/03/2020-AMRUT-11B, Dated 26th May, 2020.
3. Letter from the Commissioner and Director, the Directorate of Municipal Administration, New Mumbai, bearing No:-NaPaPraSan:2022-23/15 VAViVa/K-5 , Dated 17th November, 2022.
The 15th Central Finance Commission in its Report, has made certain recommendations for the determination of eligibility of Urban Local Self-Government Bodies in the matter of Grants from the Central Government. Accordingly, the Central Government, vide its Letters at Reference Nos. 1 and 2 has conveyed to the states that they are required to indicate Minimum Floor Rates of Property Tax, as well as to show consistent improvement in their Property Tax collection proportionate to the rates of increment in State GSDP.
In the areas of Municipal Councils/Nagar Panchayats, Municipal Corporations for Greater Mumbai and all remaining Municipal Corporations in the State, the Property Tax is levied on the basis of Rateable Value or Capital Value under various provisions of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, Bombay Municipal Corporation Act, 1888 and the Maharashtra Municipal Corporations Act, 1949, respectively. Under these Acts, Urban Local Self-Government Bodies have been permitted to adopt either of these two methods. Presently, Rateable Value is determined by taking into consideration various types of properties; moreover, under Capital Value Tax Assessment System, capital value is determined as per the value indicated in Stamp Duty Ready Reckoner. The Government contemplated that the procedure for the determination of Property Tax be laid down under the provisions of the relevant statutes vis-à-vis the present procedure for the determination of Rateable Value. Accordingly, the Government has resolved as hereunder:-
1. On the properties situated in the areas of Local Self-Government Bodies in the State, Property Tax is levied on the basis of Rateable Value or Capital Value under the provisions of Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, the Bombay Municipal Corporation Act, 1888 and Maharashtra Municipal Corporation Act, 1949. In this regard, the procedure for the determination of Property Tax is prescribed under this Government Resolution.
2. Levy of Property Tax based upon Rateable Value:-
In Urban Local Self-Government Bodies, Fair Annual Rent is determined by the Commissioner/Chief Officer by fixing per square metre rate of various types of properties. Furthermore, “Rateable Value” is determined by deducting 10% amount for the purpose of repairs from the amount of Fair Annual Rent in case of properties which are not actually let out on rent and from the amount of “Fair Annual Rent or Actual Rent”, whichever being more, in case of properties which are actually let out on rent. On such amount of Rateable Value, Property Tax is levied by charging Rates of Tax within the limits prescribed under the provisions of the relevant Acts or Rules.
While determining Fair Annual Rent, Urban Local Self-Government Bodies should take into consideration such factors as, the actual rent of properties having same type of construction and same user situated in the same zone, the principle of demand and supply, availability of properties and other local conditions etc.
Where any permanent change or addition has been made to the existing properties or properties are already assessed to Property Tax, proportionate Revaluation of properties should be carried out and in case of other properties, revision should be carried out after the period prescribed in the statute. In case of valuation of new properties, Rental Value applicable to the year in which such property was constructed should be taken into consideration.
2.1 Procedure for the Determination of Rateable Value:-
Urban Local Self-Government Bodies should adopt the following Procedure in the determination of Rateable Value of buildings and land by taking into consideration geographic location of property, type of construction, area, age of building and nature of user.
2.1.1 Division of City into Zones:-
(i) To start with, the city should be divided into various areas such as convenient regional zones based upon dense locality, moderately dense locality, sparsely dense locality, slum or local pattern, for the determination of Annual Rental Value for the levy of Property Tax.
(ii) While dividing a city into various zones for the determination of Annual Rental Value and Property Tax, availability of various civic amenities, proximity to factories and industrial areas and such other factors as the Assessment Officers may deem fit should be taken into consideration.
(iii) Since rent accruing from the properties situated on internal roads, lanes and sub-roads in the city is different from the rents accruing from properties on the main roads, zones can be fixed as per following classification as well:-
(a) Areas contiguous to Main Roads.
(b) Areas contiguous to Internal Roads.
(c) Areas contiguous to Lane and Sub-Roads.
2.1.2 Classification of Properties based upon the Nature of Construction:-
(i) Upon division of a city into various zones, properties from each zone should be classified into following types, based upon their nature of construction.
(a) RCC buildings, load bearing, building erected with stones, bricks, lime or cement, stones/bricks/earthen buildings, hut or pucca construction, semi-pucca construction, kuccha construction or any other type of construction based upon local conditions.
(b) Open space/plot.
(c) Advertisement:- mobile Tower (established on land or building).
2.1.3 Classification of Properties based upon their Nature of User:-
Urban Local Self-Government Bodies should classify all properties from a Zone into following types, based upon the nature of user:-
(a) Residential, Commercial, Industrial or Residential, Non-Residential.
(b) Special Classification may be carried out based upon mixed user and local conditions.
(c) Any other user having regard to the nature of user of properties as per local conditions.
2.1.4 To conduct Sample Survey for collecting data pertaining to actual Rental Value of Properties:-
(i) For the determination of Annual Rental Value of each type of property from each demarcated zone in the city, the Assessment Officer and Urban Local Self-Government Bodies would be required to collect data pertaining to actual Rental Value of 10 to 20% of properties based upon their various types by conducting sample survey.
(ii) All properties would be required to be classified into minimum 3 types based upon the nature of construction and minimum 2 types based upon the nature of user. Thus, in each zone there would be minimum 6 types of properties. If new user of properties are added such types are likely to go up. Hence, precise data pertaining to 10% to 20% rented out properties of 6 or more types should be collected from each zone.
2.1.5 Determination of Annual Rent:-
Upon classification of Urban Local Self-Government Body area and properties into such various types, as practicable as possible, Annual Rent for residential properties from each zone should be determined. Furthermore, Rental Value of properties used for commercial and industrial purposes should be fixed at a rate higher than the rates of Rental Value of residential properties by having regard to practicability, as per local conditions. Furthermore, Assessment Officers may fix Rental Value of properties by taking into consideration other special user such as cinema hall, petrol pumps, as well as Road/Highway etc. While assessing Rental Value, the land used for agriculture should not be taken into consideration. While assessing rent of a vacant plot, the rental value should be determined by taking into consideration the expected rent which could accrue from its actual user. Furthermore, where actual rent of properties is more than the Fair Annual Rent, the amount of actual rent would furnish basis for the determination of Rental Value.
2.1.6 Preparation of Final Tax Assessment List:-
Under the provisions of the relevant stature applicable to the concerned Urban Local Self-Government Body the procedure pertaining to Tax Assessment List, inspection of Tax Assessment List, publication of Assessment List, inviting objections/suggestions from the citizens concerning the same, taking action on such objections and preparation of Final Assessment List should be completed.
3. Levy of Property Tax based upon Capital Value:-
For the properties in the areas of Urban Local Self-Government Bodies, the method of levying Capital Value based Tax has been laid down in the Statue. Accordingly, the value of building or land denoted in the Annual Statement of Rates for the time being in force, prepared under the Maharashtra Stamps (Determination of True Market Value of Property) Rules, 1995 framed under the Maharashtra Stamps Act, 1958 is taken as the base value. Where value is not indicated in the Annual Statement of Rates, the market value of such building or land is taken into account. While fixing Capital Value under the provisions of the relevant Act, following factors are taken into account:-
(i) Nature of land structure of building;
(ii) Area of land or building;
(iii) Category of user;
(iv) Age of building;
(v) Other factor.
In order to work out the details regarding categories of land or buildings and for assigning multiple weightage points to various factors and categories vis-à-vis fixation of Capital Value, it would be necessary to frame Regulations at the level of Municipal Corporation/Municipal Council by following due process of law. The concerned Municipal Councils/Nagar Panchayats shall be at liberty to levy property tax for the areas of Municipal Councils/Nagar Panchayats based upon Capital Value within the limits between 0.1% and 1%, along the lines of provisions of the Maharashtra Municipal Corporation Act.
4. All Municipal Corporations, Municipal Councils and Nagar Panchayats, as well as Authorised Assessment Officers should obey the above procedure in the matter of Assessment Tax.
5. This Government Resolution has been made available on the website of the Government of Maharashtra viz. www.maharashtra.gov.in and its Code Number is 202303021919002225. This Resolution is attested and issued under digital signature.
By the order and in the name of the Governor of Maharashtra
Digitally signed by SHRIKANT C ANDGE
Date:- 2023.03.03 20:06:30 +5’30
Deputy Secretary, Government of Maharashtra
1] The Additional Chief Secretary to the Hon’ble Chief Minister, Mantralaya, Mumbai,
2] Hon’ble Chief Secretary, Mantralaya, Mumbai,
3] The Additional Chief Secretary, Department of Finance, Mantralaya, Mumbai,
4] The Additional Chief Secretary (Urban Development-1), Department of Urban Development, Mantralaya, Mumbai,
5] The Principal Secretary (Urban Development-2), Department of Urban Development, Mantralaya, Mumbai,
6] The Commissioner and Director, the Directorate of Municipal Administration, Worli, Mumbai,
7] All Divisional Commissioners and Regional Directors, Municipal Administration,
8] Commissioners of all Municipal Corporations,
9] All District Collectors,
10] All Joint Secretaries/Deputy Secretaries, Department of Urban Development, Mantralaya, Mumbai,
11] The Director, Town Planning, Directorate of Town Planning, Pune,
12] The Joint Commissioner, Directorate of Municipal Administration, Worli, Mumbai,
13] Chief Officers of all Municipal Councils/Nagar Panchayats,
14] The Office of Accountant General, Maharashtra ½, Mumbai/Nagpur,
15] The Pay & Accounts Officer, Mumbai,
16] All Deputy/Assistant Officer, Mumbai,
17] All District Treasury Officers,
18] All Under Secretaries/Section Officers, Department of Urban Development, Mantralaya, Mumbai,
19] Select File, NaVi-4 Desk, Department of Urban Development, Mantralaya, Mumbai.
[Translated by Adv. Prakash Manohar Chalke-