Real Estate Agency

Property Tax:Builders to be held accountable?

Flat buyers are often kept in the dark about the property taxes due on their plot/flat at the time of possession.Only later do they realise that they have been shortchanged by the builder/developer when they are slapped Property Tax Due Certificate by the Municipal Corporation,which sometimes can be to the tune of a few lakhs

Tax
Tax (Photo credit: 401K)

Courtesy:Times of India

Flat buyers are often kept in the dark about the property taxes due on their plot/flat at the time of possession.Only later do they realise that they have been shortchanged by the builder/developer when they are slapped Property Tax Due Certificate by the Municipal Corporation,which sometimes can be to the tune of a few lakhs!
It helps to remember that until the possession of the flat is handed over to the flat buyer,all taxes due on the flat/plot,are payable by whoever owns the flat/plot,which in most cases is the builder/developer.Often with the connivance of the Municipal corporations,the builder escaped payment of this tax.The Municipal corporation,which can easily make it mandatory for the builders to pay all liable taxes before handing over the Occupancy Certificate for the flat/building,happily chose to look the other way.
All this is set to change if the Minister for Urban Development,Mr.Bhaskar Jadhav,is to be believed.
According to the new rules proposed by the Minister..

  • Builders will have to pay property tax for 3 years at the time of issuance of the Commencement Certificate and if the construction is not complete at the end of 3 years,he will be liable to pay property tax for the next 3 years !

Recently,the Municipal corporation had issued more than 3.22 lakh flat owners across the city.After the opposition leader in the legislative assembly,Mr.Eknath Khadse,took up the issue,the govt changed its tune to revoke the property tax due certificate for recently completed buildings where Occupancy certificate has been issued recently but property tax has not yet been paid by the builder.

As an icing on the cake,the minister informed the house that Govt agencies like the MMRDA,SRA,Mhada along with the private builders,owed more than 10,000 crores in property tax !!

Just how and when these ideal solutions are implemented is anybody’s guess.