Homeowners' Tax Burden broadens due to Bengaluru's new Parking Tax System

A new mechanism for calculating property taxes for covered and stilt parking areas in buildings throughout the IT capital has been implemented by the Bruhat Bengaluru Mahanagara Palike (BBMP), the city's municipal body. Shopping malls should profit, but experts warn that homeowners may pay more in taxes as a result.

Residential building owners will pay 20% of the parking area at Rs. 2 per square foot for ten months, or Rs. 600 per month, under the updated Unit Area Value (UAV) tariffs. For ten months, the UAV will be billed 25% of the parking space area in non-residential regions.

In the past, parking taxes, which varied according to zonal classification (such as A, B, or C), accounted for 50% of the total property tax for residential units. According to BBMP authorities, all buildings are subject to this consistent taxing scheme, which guarantees property owners a more organized and predictable tax structure.

If homeowners and apartment owners who have parking lots in Zone A pay Rs. 1875 a year and those in Zone F pay Rs. 750, they will now be obliged to pay a fixed amount of Rs. 600 a month (20% of Rs. 2 × 10 months × 150 sq ft) for a parking area that is 150 square feet (the size needed by BBMP bylaws).

Real estate professionals caution that homeowners may have to pay more in taxes as a result of Bengaluru's updated parking tax system. In place of the previous zonal categorization system, the new tax system, which was implemented under the UAV technique, determines parking rates using a standardized rate per square foot.

"This move is completely unconstitutional and requires close scrutiny. When purchasing an apartment, the super built-up area already includes corridors, parking spaces, lobbies, and other common areas, for which property tax has already been paid. However, with this revision, many homeowners may end up paying higher taxes," said Anil Kalgi, Secretary of the Bangalore City Flat Owners’ Association (BCFOA).

Experts emphasize that the BBMP should also focus on roadside parking, which is a widespread issue in Bengaluru. "Whether roadside parking is illegal or should be taxed has yet to be addressed by the BBMP," added Anil Kalgi.