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AP Government's proposal to enhance property tax opposed
AP Government’s proposal to enhance property tax opposed
The State government proposed to enhance property tax on residential and commercial buildings in urban areas particularly cities across the State
Srikakulam: The State government proposed to enhance property tax on residential and commercial buildings in urban areas particularly cities across the State.
Enhanced property tax will be applicable from March 31, 2021. The State government decided to enhance tax on residential buildings from existing 0.1 to 0.5 per cent and commercial buildings from existing 0.2 to 2 per cent on the total value of the property.
The present system is assessment and imposition of tax based on rents prevailing in the locality. But now the government has decided to adopt new system for imposing tax which is considering market value of the property which is being decided every year by the Stamps and Registrations Department. On the total value of the building including site, property tax will be imposed up to 0.5 per cent.
For example in Srikakulam city, 300 square yards site cost is Rs 1.5 crore and on the site if Rs 50 Lakh worth building exists, the total value of the asset is Rs 2 crore.
As per the current system, tax on the property is Rs 20,000 per year but in the newly proposed system the tax is estimated to be Rs 1 lakh. Every year this tax amount will be increased based on the increase in the property value as determined by the Stamps and Registrations Department.
As per the government's guidelines, property value is being enhanced by 15 per cent every year i.e. if a property value is Rs 1 lakh this year next year its value will be enhanced to Rs 1.15 lakh. Based on the increase in the value, urban bodies will also increase the tax proportionately.
In Srikakulam city, total taxpayers are 29,850 as per the assessments in both residential and commercial categories. Total tax amount is Rs 22 crore every year under the existing tax system. With the implementation of the proposed new system, the total tax will rise to Rs 37 crore every year in the city.
"Governments are spending money lavishly to fulfill their promises which are being made to attract voters. And to fill up the deficit, they are imposing burden on common people by adopting unscientific and irrational methods. Property tax enhancement proposal is one among them," say Srikakulam Tax Payers Association (STPA) president T Bhaskar, secretary M Adinarayana Murthy and treasurer P Srinivasa Rao.
