Andhra Pradesh Business

New property tax will strengthen ULBs sans burdening people: Government

VIJAYAWADA: Rubbishing reports that the revised assessment and levy of property tax announced by the government would burden the public, Municipal Administration and Urban Development (MAUD) Minister Botcha Satyanarayana clarified that the move was only aimed at making the urban local bodies (ULBs) financially self-sufficient.

He added that the State government has taken the decision after extensive discussions, following the reforms proposed by the Centre in urban bodies to be mandatorily adopted by the States to avail relaxation on Fiscal Responsibility and Budget Management (FRBM) limit for borrowing money in view of COVID-19 crisis.

Speaking to the media at the YSRC’s central party office in Tadepalli on Wednesday, the minister said that the YS Jagan Mohan Reddy government was a pro-people’s regime and would never take decisions to burden them. “The revision of method of property tax assessment has been taken to strengthen the ULBs and provide better services to the people. The decision was taken by the CM, who wanted to ensure that the hike is nominal and wouldn’t burden the public,” he said.

Explaining how the new tax system, based on capital value (CV) of the property instead of the existing annual rental value (ARV) works, the minister explained, “Usually three months’ worth rental value is charged as property tax so far. Under the new system, the property tax would be 0.1 per cent to 0.5 per cent of the CV for residential structures, and 0.2 per cent to 2 per cent for non-residential structures. We have also clearly mentioned that the new tax (hike) would be limited between 10 per cent and 15 per cent of the existing rate. This means, under no circumstances would the hike be beyond 15 per cent for residential category.”

He added that the new assessment of property tax was already being implemented in States like Maharashtra, Karnataka and Tamil Nadu, and that the state officials visited those States to study the same before taking the decision.

For residences under 375 sq feet of plinth area, a nominal charge of `50 would be levied as property tax, Botcha added, because the property rights will be given only if taxes are paid. “I have also interacted with various stakeholders who said they were okay with the hike if it is below 20 per cent. However, we have restricted it to 15 per cent itself,” he said.

The minister, however, did not talk about the concerns raised by civic organisations such as the Andhra Pradesh Urban Citizens Federation (APUCF), which said that the property tax would go up significantly as it would be revised every time the stamps and registration department revises the land rates, which happens almost every year.

Further, Botcha clarified that the revision in user charges for water supply and sewerage services also won’t burden the public.

“The revised taxes are only to cover the gap between operation and maintenance costs for the supply of water, but not meant for additional income to the municipalities.

The new sewerage taxes are also nominal. The revenue thus accrued would be spent in the respective ULB for betterment of services and the CM has already told the finance department to not to touch those funds,” he said.