2X property tax on rented Properties - Major bang in Bengaluru Real Estate

According to the Real estate experts, Bengaluru city foreseeing a pointed rise in property tax after the local municipal corporation BBMP (Bruhat Bengaluru Mahanagara Palike) planned guidance value-based tax collection. The plan will probably push up the previously elevated rentals of apartment rentals.

As denoted by the Government, the Guidance value is the minimum price of a property. As per the new draft notification, the tax for property will be accumulated based on the circle rates or guidance value in the areas. Formerly, the municipality corporation used to collect the tax for property based on zonal classification in an area wise order.

The most prominent changes done in the proposed draft notification is that the proprietors of the rental properties in Bengaluru Real Estate should pay double (2x) the tax amount compared to the self-acquired properties. The new rates for tax will be set at 0.2 percent - guidance value for rental properties and 0.1 percent-guidance values for self-acquired properties.

On this regard, Anil Kalgi, President of the Bangalore City Flat Owners' Welfare Association says, "Another major impact can be an overall increase in property tax, as in several places the properties are being sold at lower prices than the guidance value itself,"

At the same time, Dhananjaya Padmanabhachar, president of KHBF – Karnataka Home Buyers Forum, says, "If the property tax is increased by 5 percent every year, there are chances of property prices and rent increasing drastically which becomes a financial burden for middle-class home buyers."