There’s a bit of not-so-good-news for property owners in Bengaluru. Come April next year, property tax and water charges for all types of buildings is set to increase. The Urban Development Department (UDD) has directed the Bruhat Bengaluru Mahanagara Palike (BBMP) to dump the traditional ‘unit area value’ method and adopt the ‘guidance value’ method to calculate property taxes. Experts believe the move is likely to see two to five-fold increase in tax collection, putting many property owners, especially senior citizens, in a fix.

The directive to the civic body comes following a letter from the Ministry of Housing and Urban Affairs (MoHUA) to adopt uniform tax measurement mechanism in all urban local bodies across the state. While corporations in rest of Karnataka have already adopted guidance value linked property tax collection system, the BBMP continues to follow a different method that measures the property tax based on the rental demand.

“What BBMP follows is a complicated system. It has to be set right. Property tax in HSR Layout is much lower than in Kengeri. Other than BBMP, all the corporations in the state have property tax payment linked to guidance value. The new mechanism will also allow the government to increase market borrowings from 3% of the state GDP to 5%,” Rakesh Singh, Additional Chief Secretary at UDD told Bangalore Mirror.

Meanwhile, the UDD assured the MoHUA that the guidance-value linked tax measurement system will be put in place by end of this year. The Centre has also suggested periodic increase in property tax. The new mechanism will also allow the government to increase market borrowings from 3% of the state GDP to 5%

Sapna Karim, member of the executive committee at Janaagraha Centre for Citizenship and Democracy, a non-profit, welcomed the proposal. “While BBMP annual budget is around Rs 10,000 crore, the money raised from property tax stands less than Rs 3,000 crore. From building enumeration to tax structure, the corporation needed a better system,” she said.

Some, however, were not happy with the timing of the change. Abdul Wajid, opposition leader in the council, said it’s not the right time to increase taxes when the people are in deep trouble due to the pandemic.

NS Mukunda of Citizens Action Forum said the new proposal will deal a big blow on property owners who have no income, especially senior citizens. “Not all owners have rented out their property. Some may have built houses several years ago but they may not have any income now. The BBMP should first put up the proposal in the ward committees and later take it to the council and government,” he urged.

Meanwhile, the Bengaluru Water Supply and Sewerage Board (BWSSB), on its part, has sought a revision in the water and sanitary charges