MUMBAI: Owners leasing out properties to banks will have to cough up more than four times the property tax paid by bars under the BMC’s new capital value-based system. The new tax is almost twice of what is applicable to a five-star hotel and nearly 20 times more than that for a residence.
Take, for instance, Bhulabhai Desai Road. Property tax for banks in the locality is calculated at Rs 292 per square feet a month whereas on VP Road in Khar it is Rs 68.7.
A document in possession with TOI (submitted by corporator and Samajwadi Party leader Rais Shaikh to municipal commissioner Sitaram Kunte) specifies the break-up of property taxes for various categories-residence, shop, restaurant and bar, five-star hotel, shopping mall and bank (ground floor and first floor).
On V P Road, for instance, yearly property tax calculations for a bank with a 200-sq-m branch work out to Rs 17.7 lakh (for the ground floor) and Rs 13.2 lakh (first floor).
This proposal, which was passed in the civic standing committee, will be reopened following several objections.
Justifying the BMC’s stand, Rajiv Jalota, additional municipal commissioner, said, “Most banks in Mumbai are leasehold properties and not self-owned, except for old banks such as Bank of Baroda. When we conducted a study we learnt that in the new system the amount collected was much lower than in the previous system. So, that is why we were constrained to hike it. Even by keeping rates on the higher side for banks, we are still suffering a loss.”
Rahul Shewale, standing committee chairman, said, “We have formed a committee which will study the objections and submit a fresh proposal to reduce taxes. It will be reopened in the standing committee and implemented in 2014-15. The decision regarding banks that have been issued bills with retrospective effect from April 2010 is pending.”
A Property Owners’ Association circular said taxes are “extremely high” in case of offices, premises with banks and financial institutions, and will lead to banks shifting base.
Showing the BMC bills, a man who has leased his property to a bank in Vile Parle said, “I used to pay Rs 7.5 lakh annually through the earlier rateable value system. Now I have to shell out Rs 13.35 lakh in the capital value-based system.”
Vinod Shah, who has leased his premises for an HDFC Bank branch, said, “Does the BMC want us to stop leasing to banks and venture into beer bars?” Another owner who has leased to Kotak Mahindra Bank and HDFC Bank said, “Banks are a basic necessity, not a luxury. They provide services to the public free of cost.”