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The SDMC (South Delhi Municipal Corporation), in an effort to leverage its revenue, would be increasing the slabs of property tax on commercial and residential property. The civic body has come up with a proposal to put its plan into effect. Incidentally, it will bring about a reduction in the number of rate slabs, which are presently three.
Currently, in South Delhi, commercial, residential and non-residential plots measuring up to 150 sq. mt. are segregated into three categories. These are A-B, C-E and F-H. The civic body proposed that in the financial year 2022-23, it is likely to reduce the number of categories to two from the existing three. The authorities came up with this proposal while they were presenting the revised estimates for budget at the civic centre.
According to the new proposal, there might be an increment in property taxes for residential property by 14% in categories A to E and 12% in F to H. Presently, people owning property categories A and B need to shell out 15%, and those in categories C to E need to shell out 11%. In the commercial segment, 15% tax will be levied for categories A to D, and 12% for categories E to H. The tax rate for the special category is presently 20%.
If the increment in tax rates becomes functional, it would have a key impact on real estate purchases. While the move is likely to bolster the revenue collection of the civic department, real estate buyers and sellers would not be very happy. At a stage when the real estate industry is gradually recovering from a slowdown following the second wave of the pandemic, people would be looking forward to keep their expenses low. It remains to be seen whether the decision has any impact on the sale of real estate in South Delhi.
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