Property tax in south Delhi may increase by 33%

South Delhi Municipal Corporation’s house on Monday approved the preliminary recommendations of the 4th Municipal Valuation Committee (MVC) which if accepted will lead to a hike of “at least 33%” in property tax. Mayor Narendra Chawla said the report will now be put in public domain for the next 30 days. The house will consider the feedback and suggestions and sent the final report to the lieutenant-governor. “The biggest changes have been proposed in unit area values and use factor. The age factor, occupancy and structure factors have remained unchanged,” an official explained. The committee has justified the minimum of 33% hike based on its assessment of the civic body’s finances. “It is alarming to observe that the projected deficit is going to be 20 times more than what it is today. There has been no change in the unit area value since 2004 while inflation has increased by 33% on an average. The revenue-expenditure gap is projected to the tune of Rs 7,156cr in year 2020-21,” the committee has observed. For residential property owners, the biggest impact will come from hike in unit area values. “A new category H1 (130) has been carved out for new colonies i.eunauthorised areas, JJ clusters etc keeping in mind that tax compliance is lowest in this category. The committee has tried to restore the original objectives by making the property tax inflation-indexed,” said the official. The MVC has also changed the categories of many colonies. The report explains that some areas have benefited as they have been downgraded due to absence of metro, commercial streets etc. Another significant change has been in the use factor for non-residential properties. The residential properties will continue to have the same use factor of 1. Delhi Municipal Corporation Act (2003 amendment) contemplates that a new MVC committee should be constituted every 3rd year and the present dispensation MVC-4, headed by GS Patnaik a retired IAS, was constituted in February 2017.