Haryana government on Tuesday proposed to re-impose property tax in areas under urban local bodies to generate revenue and also ensure restoration of some grants stopped by the Centre besides hiking by 10 times the rate of fire tax imposed on non-residential properties .

The property tax was scrapped in 2010 by the Bhupinder Singh Hooda-led Congress government. But after this, some grants for the local bodies were stopped by the Centre on the plea that these institutions should also generate their own resources to be eligible for central grants.

Addressing a meeting of Mayors and Chairpersons of Municipal Corporations, Municipal Committees and Municipal Councils here today, Chief Minister Bhupinder Singh Hooda said "the government did not want to put the burden on the people but the people's amenities also have to be taken into account."

He said the government had done away with house tax but there were objections and certain grants (from the Centre) were also stopped. "The government wanted to put house tax at minimum or of very nominal rate. The urban local bodies could also think of new ways to increase their resources and the government would provide support," he added.

The government has also decided to increase the rate of fire tax which would be applicable for only non-residential properties. The new rate would be 10 per cent of property tax as against the present rate of one per cent, the spokesman said. The date of notification would be announced soon after the proposal was formally approved by the state cabinet, he added.

The meeting also deliberated on the proposal for the introduction of the property tax. The Mayor and Chairpersons of Municipal Corporation, Municipal Committees and Municipal Councils acknowledged the need for implementing the property tax in cities, an official spokesman said.

He said notional house tax of Re one per square yard has been proposed for houses up to 250 square yards. As much as 87 per cent houses under Municipal Committee or Council areas and 76 per cent houses under Municipal Corporation areas are such houses.

As per proposal discussed, houses of up to 250 square yards and flats of sizes up to 500 square feet would be charged a nominal property tax rate of Re one per square yard.

The meeting felt implementation of property tax would help urban local bodies fulfill the expectations of the people by providing more facilities and amenities.

The 13th Finance Commission had described abolition of house tax as a "wrong" step and against Constitutional provisions, he added. The property tax receipts are also considered as the proof of ownership of rights or property, he said.

In absence of property tax, access to funds of more than Rs 500 crore grants (from the Centre) was pending, he said.

The meeting decided unit area method should be followed as was being done in states like Gujarat, Karnataka, Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Bihar. The spokesman said the meeting also decided to give concession of up to 50 per cent in property tax to self-occupied houses.