Monday, 3 October 2016

Property taxes: What can buyers expect in specific neighborhoods of Bangalore

Property taxes: What can buyers expect in specific neighborhoods of Bangalore

For the first time in eight years, property taxes were hiked in Bangalore in April 2016. The tax structure has grown about 25 per cent; the guidance value and zones for taxation have also been re-jigged. In addition, as per the new rules, if you have not paid the property tax by 30 April, you will not be entitled to a 5 per cent rebate.

Read on to find out how the latest changes can affect your decision to buy a new home.

A primer on property taxation

Normally, people invest in properties that can be a good source of income for them through rentals. But taxes are levied on such income. The amount of tax depends on the value of the property being taxed. There are different types of property taxes in India. Finance minister Arun Jaitley has put a cap on tax savings on long-term investments (in one property). Capital gains on property held for three years will attract 20 per cent tax. The figure will differ if the owner has a residential house, office building, factory, flat or shop. If you do not pay the taxes on time, a 2 per cent interest is levied every month.

In India, property tax is calculated on the annual value of a property. The value differs for self-occupied home and for rentals. Even some neighbourhoods attract different taxation. For a rental property, the annual value will be a total of municipal valuation, rent received and fair rent which is derived by the IT department. There are some deductions permitted.

How Bruhat Bengaluru Mahanagar Palike (BBMP) works

From now onwards, the BBMP will not accept any cheques; it will only accept cash or demand drafts. But the best is online payment with a debit or credit card as it attracts no additional charges. Besides, this method of payment is easy, quick and safe. Property tax can be paid at the nearest CSC or citizen service center under SAS scheme of 2000. Two instalments are accepted by the authorities. If you intend to pay online, you will be asked to furnish a copy of the electricity bill in digital form.

Different zones
BBMP has classified properties in Bangalore into six different zones from A to F, with A being the highest taxpaying zone and F the lowest. It is proposed that property tax will be fixed according to the zonal rate.

About Author:
Seema Mohta has helped many property buyers in her 7 years of experience within Real Estate Industry by giving the right advice in choosing the right property at best price from the right buyers. She has worked with Various Real estate companies and has Good knowledge about property trends, Investments, Luxury penthouse projects,  2bhk flats for sale in Yeshwanthpur, Residential projects etc.

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