SDMC to Cancel Raised Property Tax Rates for Leased Commercial Properties, Real Estate News, ET RealEstate
Officials say the tax on leased commercial properties was increased on the recommendations of the Municipal Appraisal Committee-3 (MVC-3) which was implemented in April of last year.
MVC-3 recommended almost doubling the property tax on leased business premises, telecommunications towers, vacant commercial land, vacant industries, wedding halls, banquets, educational institutions, entertainment facilities and recreation.
These recommendations were implemented in April 2020 but were approved in July 2020 with retrospective effect.
The decision to reverse the tax hike was taken at the SDMC standing committee meeting on Tuesday.
SDMC officials say the decision to reverse the tax hike will benefit traders and the business community, but will eat into the coffers of SDMC, which already faces a shortage of funds.
“With this decision, the civic body is expected to bear losses of 70 to 80 crore rupees per year. Under the jurisdiction of the SDMC, around 9,000 commercial properties have been leased, so we were anticipating a good generation of income,” he said. said a senior SDMC official. on condition of anonymity.
SDMC standing committee chairman BK Oberoi said the decision was made in the public interest and will benefit a large number of traders and revive industries on the brink of collapse due to the pandemic. coronavirus.
âWe have decided to cancel 100% of the tax hike that was made on the recommendations of MVC-3. Now the status quo of 2019 tax rates will be maintained. This means people will have to pay taxes on rented commercial properties and other categories mentioned as they paid in 2019, âOberoi said.
He said the annulment decision would now be approved by the SDMC Chamber and then implemented.
He said the civic body had received many representations regarding the difficulties faced by traders in paying additional taxes, so the decision was made for the public welfare.
âThe economy has slowed down and industries are suffering due to the COVID-19 pandemic. So it was necessary to relieve traders to keep the economy going. The decision was made in a greater public interest,â Oberoi said. .
As per the recommendations of MVC-3, owners of commercial properties that were leased, along with other categories mentioned, had to pay double the property tax against those establishments.
This would vary for commercial leased properties depending on the location, size of the property and other technical factors.
“Now, owners of leased commercial property and other categories will have to pay property taxes in accordance with the old tax tiles as they paid in 2019,” another SDMC official said.