MUMBAI: The Brihanmumbai Municipal Corporation will soon start collecting penalty for unauthorized constructions or extensions at twice the property tax levied on the entire illegal area.
The provision for the penalty was made under section 152(a) that was added to the Mumbai Municipal Corporation Act, 1888, in April 2010 as an amendment to accommodate the new structure for calculation of property tax. After the amendment, property tax is decided on the basis of a property’s capital value.
Municipal commissioner Sitaram Kunte made the announcement while tabling the BMC budget on February 5.
“Though provisions for a penalty were made in 2010, we will implement it from June 2014 as the new property tax system has now stabilized and has all the relevant data in place to initiate action,” said a senior official. But BMC is yet to decide if the penalty should apply from 2014-15 or retrospectively from 2010, when the law was amended, he added.
Civic officials explained the new rule with an illustration. Suppose a person owns a 1,000 sq ft flat for which he is paying property tax. He adds 200 sq ft area to his house by constructing illegally. According to the new rule, he has to pay property tax for the 200 sq ft, and a penalty that is twice the property tax calculated for the illegal area. Thus, even if he is occupying 1,200 sq ft, he will be asked to pay property tax for 1,600 sq ft. Similarly, if the flat is entirely illegal, the penalty will be twice the property tax of the flat.
The rule says levy of penalty and collection of property tax cannot be construed as regularization of the unauthorized construction. Some common illegal extensions are enclosing open spaces like balconies, terraces, refuge areas or extending the area of shops by encroaching on footpaths.
Some procedural issues still need to be sorted out. “We may need to link the property tax system with the action initiated by designated officers in every ward appointed to check illegal construction. The rule says proceedings must be initiated to prove a construction as illegal before penalizing the owner,” added the senior official.
Before April 2010, the BMC calculated property tax on the basis of the rent that a property could fetch. Since the revision, the tax is being calculated on the basis of the capital value of the property.