How To Calculate Your Property Tax

Source: The Hitavada      Date: 01 Dec 2017 09:28:39


By Manish Soni,

Formula of property tax calculation

Now as per formula to calculate ALV = Location block Rate x Net Built Up Area x Structural Factor x Use Factor x age factor x occupancy.

THE cash-strapped Nagpur Municipal Corporation (NMC) is facing stiff opposition from the property owners for manifold increase in tax. The city has around 7.5 lakh properties but the property tax is around Rs 200 crore. Other cities like Akola are generating more tax than Nagpur.
In Nagpur, the property tax department has enforced Ratable Value Based tax system from April 1, 2017. This is based on the Annual Letting Value (ALV) of the property.

The property tax is based on several factors like block, net built up area, structure factor, weightage, use factor, age factor and occupancy. The property tax department calculates monthly rent and then yearly rent of the property. The department is deducting 10 percent amount from the total letting value and then the general tax will be calculated. After general tax, the other taxes like water tax, special cleaning tax, government education cess, EGS, sewage benefit tax, fire tax, water benefit tax, road tax, NMC education cess, big building tax will be added.

Milind Meshram, Assistant Commissioner of Property Tax, informed ‘The Hitavada’ that the city has been divided into six blocks based on the ready reckoner rates of the properties. Properties having ready reckoner rates above Rs 50,000 are in Block 1 of value Rs 11 while properties having RR value between Rs 40,000 and Rs 50,000 are in Block 2 of value Rs 10.

Properties having RR value between Rs 30,000 and Rs 40,000 are in Block 3 of value Rs 9, and properties having RR value between Rs 20,000 and Rs 30,000 are in Block 4 of Rs 8.
Similarly, properties having RR value between Rs 10,000 and Rs 20,000 are in Block 5 of Rs 7 and properties below RR value of Rs 10,000 are in Block 6 of Rs 6.

The structures of the properties are divided into four categories — Premium quality (weightage 1.25), Good quality (weightage 1), Average quality (weightage 0.80) and Low quality (weightage 0.50).
The Use factor is divided into three categories — Commercial (weightage 2.5), Unspecified (weightage 2) and Residential properties (weightage 1).

The commercial properties include airport building, marriage halls, restaurants, bars, ATMs, malls, multiplexes, theaters, petrol pumps, banks, health clubs, bedded hospitals, super specialty hospitals, class, club houses, AC offices and shops, lodges, special parking places.
The Residential properties include open plots, residential buildings, trust hospitals, education institutes, religious buildings, sports grounds, advocates chambers.

The Unspecified category has godowns, industries and non-AC offices and other properties that are not covered in commercial and residential category.
The Age of the properties is divided into 7 sectors — property age between 0-10 years (weightage 1), age between 11-20 years (weightage 0.95), age between 21-30 (weightage 0.90), age between 31-40 years (weightage 0.85), age between 41-50 (weightage 0.80), age between 51-60 years (weightage 0.75), and above 60 (weightage 0.70).

The area of the property will be calculated in sq mts. Ten percent will be deducted from total super built up area to calculate the ALV.
The Special Clean Up area will be calculated for hotels, restaurants, bedded hospitals. They have to pay 7 percent of the ALV upto Rs 50,000 and 10 per cent for ALV above Rs 50,000.

The EGS will also be calculated on non-residential properties. Rate of EGS is 1 per cent for ALV Rs 1-150, 1.5 percent for ALV Rs 151- Rs 300, 2 percent for ALV Rs 301 to Rs 3000, 2.5 percent for ALV Rs 3000 to Rs 6000, and 3 percent for ALV above Rs 6000.

The Government Education Cess is also calculated 2 per cent for ALV Rs 1-150, 3 percent for ALV Rs 151- Rs 300, 4 percent for ALV Rs 301 to Rs 3000, 5 percent for ALV Rs 3000 to Rs 6000, and 6 percent for ALV above Rs 6000. The non-residential properties will have to pay 4 per cent for ALV Rs 1-150, 6 percent for ALV Rs 151- Rs 300, 8 percent for ALV Rs 301 to Rs 3000, 10 percent for ALV Rs 3000 to Rs 6000, and 12 percent for ALV above Rs 6000. The big residential building will also have to pay 10 percent tax.

If the property does not have any tap water connection, then it will have to pay water cess according to the ALV. The water cess for ALV Rs 1 to Rs 2000 will be 10 percent, ALV for Rs 2001 to Rs 5000 will be 12 percent and ALV for Rs 5000 and above will have to pay 15 percent water cess.