VIJAYAWADA: The revenue wing officials of Vijayawada Municipal Corporation (VMC) have been contemplating to amend the property tax slab under its ambit, in the wake of a recent bill passed by the State government to levy taxation based on the market price of the property as against the earlier method of levying tax based on the rental value of the property.
As per the revised tax slab, property tax is likely to be enhanced for residential buildings between 0.1 and 0.5 per cent of the property’s capital value. When it comes to non-residential buildings, it would be 0.2 percent to 2 per cent of the capital value, official sources said. So far, property tax is calculated on annual rental value at a rate of 22.50 per cent for residential and around 30 per cent for non-residential.
In all, the city has 1.92 lakh assessments, of which 1.58 house assessments and 34,000 commercial assessments. The civic body has a target to collect Rs 129.81 crore during the 2020-21 fiscal year. Of the total, the demand from households is Rs 106.83 crore and Rs 22.99 crore from commercial establishments. “We are studying the guidelines issued in the Government Order (GO) for making amendments to the property tax slab. Awareness will be created among all the taxpayers in the city through pamphlets”, a senior VMC official said.
Taxpayers Association general secretary MV Anjaneyulu told The New Indian Express that as per the GO issued, it is mentioned that if the property tax is calculated on the basis of new method is exceeding 15 per cent on the present property tax being paid by the individual, which is calculated on the basis of annual rental value, should now be limited to 15 per cent.
However, the government mentioned in the GO that this 15 per cent limitation will not be applicable for new buildings, which are still unaccessed.
“We are against the procedure of calculating the property tax based on the capital value because it heavily burdens house owners directly and on tenants indirectly. It also leads to inflation. Calculation of property tax on this method will be increased every year automatically as and when the property values in the registrar office are enhanced in accordance with inflation”, Anjaneyulu said.
He also asked the government withdraw the amendments made to Andhra Pradesh Municipal Corporation Act 1955 and AP Municipalities Act 1965 in respective of property tax collections.