33% hike in the property tax is expected if the recommendations of the interim Fourth Municipal Valuation Committee (MVC) — which have been put up in the public domain by South Delhi Municipal Corporation (SDMC) to seek feedback, suggestions, and criticism from residents — are accepted in their current form.
On June 17th, a notice was issued by SDMC which states that modifications can be done till July 16th based on the suggestions given by the residents to the interim provisions to the accessor and collector’s office. Before agreeing on any reports, the MCV will consider these feedbacks. So far, no feedback has been received by the civic body.
“The biggest changes have been proposed in the unit area value and use factor. The age factor, occupancy and structure factors have remained unchanged,” an official said.
The civic body’s finances are the reason behind the 33% hike. According to the report, the projected deficit is going to be 20 times more as compared to what it is today. Since 2004, no changes have been made to the unit are value even though there has been a rise in inflation by 33% on average.
As per the unit area method, calculation of property tax is based on the multiplicative factor of six components — total covered area, unit area value (in Rupees per square metre), age, occupancy, structural and use factors.
A new category- H1 (130) has been added in the report which is specially carved out for the unauthorised colonies, JJ clusters, etc. whose tax compliance is the lowest. The categories of many colonies have been changed by MCV. Some of the areas have also benefitted from these changes since they have been downgraded due to the non-availability of the metro, commercial streets, etc. The colonies in the A category remain the same whereas the colonies in the B category have dropped from 51 to 44.
The interim report shows the largest jump in the number of E category colonies and the largest drop in F category. For example, Vasant Enclave has moved from A to B category, Sarita Vihar from C to D, Safdarjung Enclave from B to A, GK-I from A to B and Green Park from A to B.
The factors considered for change in the category included new metro corridors, conversion of residential areas to mixed land use/commercial, higher FAR benefits, economic status of residents, proximity to commercial centres, infrastructure, age of colony and capital value of the land.
The public notice states that the colonies which are not on the list should be brought to the notice of the accessor and collector otherwise they will be classified based on the highest classification in the surrounding areas.
A significant change is also been seen in the non-residential. The use factor for residential properties is going to be the same as 1. However, multiplicative factor for banks, ATMs, telecom towers and banquet halls has been increased to four, hoardings five, guesthouses two and 0.5 for a vacant land, which earlier used to be 0.3.
Delhi Municipal Corporation Act (2003 amendment) recommends that a new MVC should be constituted every third year.