The Housing and Urban Development department today announced the rules for levy, assessment and collection of property tax in the Municipalities and Municipal Councils of the UT. Both residential and non-residential properties have been included in the collection of the property tax.
Earlier, there were reports that the government may initially exempt residential properties from the property tax.
The property tax calculated in respect of a building shall hold for a block of three years unless any change to the calculation is necessitated on account of the circumstances envisaged in the Act for allowing revision in such calculation.
The first block shall commence from 1 April 2023, and shall continue to remain in force till 31st March 2026. The blocks shall be similarly calculated thereafter.
The property tax on residential property is 5 per cent of the Taxable Annual Value (TAV) and the property tax on Non-Residential Property is 6 per cent of the Taxable Annual Value (TAV).
The TAV would be calculated by multiplying as many as nine factors.
“The TAV will be calculated on the basis of Municipality Type Factor + Land Value Factor + Area Factor + Floor Factor + Usage Type Factor + Construction Type Factor + Age Factor + Slab Factor + Other Usage Types,” reads the government notification.
The government has exempted vacant lands, not appurtenant to a structure/building from property tax if there’s a Master Plan in force in the area, under which any construction/development on such vacant land is disallowed.
“All the properties of Municipality and places of worship including temples, masjids, gurudwaras, churches, ziarats, etc and cremation and burial grounds shall be exempted from property tax. All properties owned by the Government of India / UT Government shall be exempted from Property Tax. However, service charge at the rate 3 per cent of the taxable annual value shall be payable to Municipality in respect of such properties,” reads the notification.
Prior to its special status being revoked on Aug 5, 2019, the state had been exempted from the imposition of property tax. However, a year after the abrogation of Article 370, the Union Ministry of Home Affairs (MHA) in October 2020 had authorized the J-K administration to impose the property tax after an amendment to the J-K Municipal Act, 2000 and J-K Municipal Corporation Act, 2000 through the J&K Reorganisation (Adaption of State Laws) order, 2020.
All the political parties, traders and civil society groups in the Union Territory had opposed the imposition of property tax in J-K, which has been witnessing militancy since 1990.
However, after facing flak, the administration in 2020 had dropped the plan of imposing property tax in the Union Territory.