The tech capital of India – Bengaluru has so far enjoyed an 8-year hiatus from property tax hikes. But that is set to change with the Bruhat Bengaluru Mahanagara Palike (BBMP) all set to revise tax rates in the city from April 1, 2016.

What’s Set to Change?
Sources in the BBMP have told NDTV that the hike could be in the range of 15 to 50% for residential properties, and between 20 and 25% for commercial properties. These rates will vary depending on the guidance value in different zones.

The BBMP will also be reshuffling tax zones in the city and they are considering a minimum cap on the amount of tax that each zone has to pay. The civic agency is hoping that this will ensure that different areas in each zone make a fair tax contribution.

A Tax Hike After 8 Years, That’s Not Too Bad, Right?
While various citizen groups and real estate consultants have welcomed the move, they are worried about the section of the population who are not assessed for property tax. According to estimates, only 50 to 60% of residents in the city have so far complied with existing property taxes, leaving a huge number of properties unaccounted for. Some experts believe the quantum of the new hike could have been lower if these properties had been taxed to begin with.

What’s more, the Karnataka Municipal Corporation Act says that tax rates need to be revised every 3 years between 15 and 30%. Had the BBMP followed this mandate earlier, this sudden hike would not have come as much of a shock. As things stand, real estate in the city will become more costly especially since guidance values are being revised. Experts expect rentals for both commercial and residential properties to escalate.

Has The BBMP Learnt From Its Mistakes?
The BBMP says that they are now focusing on ‘increasing financial discipline’ by improving their tax base. They are undertaking renewed property identification using Geographic Information System (GIS) mapping and are also taking the help of the National Informatics Center to help them meet their goals.

Lakshmi Sivadas, Reporter, NDTV