1. Introduction to Property Tax
Property tax is a very significant source of revenue for the state government. It is imposed on the owner of the property. Property tax levy is delegated to various municipalities within the states to ensure efficient and smooth maintenance of civic amenities in various localities such as maintenance of local roads, drainage, cleanliness in the area, public parks etc. Property tax is governed by State Government and further delegated to various municipalities which result in the difference in basis of levy, computation, mode and manner of its payment.
In this article, we will be simplifying property tax levied by Hyderabad municipality and tax benefits of property tax to help our readers understand and plan their Hyderabad property tax payment in a better way.
2. Introduction to GHMC property tax
Owners of properties in Hyderabad are liable to pay property tax to Hyderabad Municipality body called Greater Hyderabad Municipal Corporation (GHMC) every year. The municipal body utilises these funds to facilitate better public services in Hyderabad.
The GHMC uses annual rental value as the basis for collecting property tax in Hyderabad and also GHMC adopts a slab rate of taxation for residential properties.
The GHMC provides property tax calculator on its website which can be used to ascertain the approximate value of property tax by filling the relevant details about your property. Exact value may vary based on the exact location of the building and other parameters.
3. Formula for GHMC property tax computation
Formula to compute GHMC property tax is different for residential property and commercial property:
Residential property tax computation
Annual property tax = Gross Annual Rental Value (GARV) x (17% – 30%) Slab rate to be determined based on MRV as fixed by GHMC – 10% depreciation] + 8 % library cess
GARV = Plinth area x Monthly rental value in Rs/ sq ft x 12
|Monthly Rental Value (in Rs)||General Tax||Other Tax (Conserting Tax, Lighting Tax, Drainage Tax)||Total|
|51 – 100||2%||15%||17%|
|101 – 200||4%||19%|
|201 – 300||7%||22%|
|300 and above||15%||30%|
Plinth area is the total built-up area which includes balconies and garages. In order to determine monthly rental value for self-occupied properties, rental of other similar properties in the same locality needs to be considered. In case of let-out properties, rental value is to be determined with the help of the rental agreement.
Formula for GHMC commercial property tax computation
Annual Property Tax = 3.5 x Plinth Area in sq.ft. x Monthly Rental Value in Rs/sq.ft.
Monthly Rental Value/Sq ft for commercial properties is fixed by GHMC based on taxation zones/ locality and type of construction and usage.
4. Due date, penalty and other rewards
- The last date for the payment of half-yearly property tax is 31 July and 15 October
- Delay in the payment of property tax results in levy of penal interest @ 2% per month on the outstanding amount.
- GHMC has been taking initiatives to encourage taxpayers to clear previous arrears and present payment. GHMC has in fact announced cash rewards based on lucky draw for payment before specified date for the year 2016-17
5. New assessment of GHMC property tax
In case of new property, the application shall be submitted with sale deed, Occupancy certificate etc to the concerned Deputy Commissioners for assessment of property tax. The concerned tax inspector/Valuation Officer/Assistant Municipal Commissioner/Tax Inspector will inspect the building physically and also verify the legal title and litigation if any and assess the property tax as per prevailing rates of the residential and fixed rate of non-residential properties. A Unique Property Tax Identification Number (PTIN) is generated for the new assessment, with a new House Number.
Online Self Assessment Scheme
- Online Self Assessment Scheme has been introduced by GHMC.
- The property owner can submit application for new assessment through online by providing personal details of the owner, property details such as Building Permission Number, Occupancy Certificate Number, Locality Name, nature of the building, usage, plinth area, etc., based on which, approximate annual property tax will be displayed on the screen.
- The Online application is forwarded to the Deputy Commissioner Login. The concerned VO/TI will inspect the premises and levy property tax as per prevailing rates.
- A Special Notice will be issued to the owner duly allotting a new PTIN
6. Steps for payment of GHMC property tax
Payment by online mode
Property Tax Identification Number (PTIN) is given to every taxpayer for each property. PTIN number is unique Fourteen digits in case of old PTINs and Ten digits for new PTINs. You can enter this number in the website and make the payment online. Further, GHMC website automatically displays tax due of a property which has been given PTIN. You can view the same using PTIN and make the payment.
Step 1: Visit Online payment portal of GHMC website:
Step 2: Enter your Unique PTIN and click on ‘Know Property Tax Dues’
Step 3: Verify details of arrears, property tax, interest on arrears, adjustments etc. and choose to make payment either via net banking, credit card or debit card
Step 4: This will take you to payment gateway page. Login to net banking or enter your card details and complete the payment.
Payment by offline mode
Payment of property tax can also be made at any of the Mee-Seva counters, citizen service centres, Bill Collectors, AP Online Service Delivery or at any State Bank of Hyderabad branch. The cheque/Demand Draft should be drawn in favour of ‘Commissioner, GHMC’
7. Exemption/Concession from payment of property tax
- As mentioned in the property tax rate slab above, properties with monthly market rental value of up to Rs 50 are exempt
- Properties owned by present or ex-military servicemen, owned by charitable institutions, places of religious worship and recognized schools are exempt
- 50% concession on properties with vacant premises, subject to official report submitted by tax inspector