As a property owner, property tax is one of the taxes you must pay annually. This tax is charged by the State Government and is used to upkeep and develop civic amenities like schools, roads, garbage disposal services and drainage systems. AAs local municipal bodies collect this amount within a city, the amount, computation method, and applicable mode of payment may vary. For instance, if you own property in Hyderabad, then you come under the purview of the Greater Municipal Hyderabad Corporation and are required to pay GHMC property tax.
Read on to understand the various aspects of GHMC house tax and how you can plan your GHMC tax payments efficiently.
Introduction to property tax
Property tax is a direct tax imposed by the State Government on property owners and is collected via municipal corporations of the city. This tax is applicable on residential buildings, corporate buildings, apartments, and other tangible real estate you may own. It is a substantial source of income for the state government and is used to construct, maintain and improve public infrastructure and services. A property owner has to pay the tax annually and its computation depends on several 4factors like the value of the property and the state you hold the property in.
Introduction to GHMC Property Tax
If you own property in Hyderabad, you fall under the Greater Hyderabad Municipal Corporation (GHMC) jurisdiction and have to pay GHMC property tax dues every year. Similarly, if you hold property in Telangana, Telangana property tax is also collected by the GHMC.
To calculate the amount of property tax you have to pay, you can simply go to the property tax calculator on GHMC’s official website. Here, you need to add relevant details of your property, and the calculator gives you an estimation of the payable GHMC house tax. The GHMC property tax is computed based on the annual rental value of the property.
Formula for GHMC property tax computation
GHMC taxes residential and commercial properties differently and hence uses different computation methods for the two. Read on to know about the formulae used for GHMC property tax for both residential and commercial properties.
Calculation of residential GHMC property tax
Before considering the formula, take a moment to understand the parameters used to calculate property tax for residential properties.
Plinth area: Includes the entire built-up area such as garage, corridors and balconies.
Gross Annual Rental Value (GARV): Plinth area × Monthly Rental Value (MRV) in Rs. per sq. ft. × 12
Now, the annual GHMC house tax is expressed as,
Annual residential property tax = GARV × (Slab rate−10% depreciation) × 8% library cess
The GHMC applies the slab rate model of taxation to residential properties. Here, the slab rate varies from 17% to 30% and is determined by the MRV, as ascertained by the GHMC. To understand this better, look at the table below
|MRV (Rs.)||General Tax (%)||Miscellaneous taxes like Drainage tax and Lighting Tax (%)||Total tax levied|
|300 and more than 300||15||15||30|
|Up to 50||Exempted|
Note that if you occupy the property you own, then the MRV of similar properties is considered to calculate GARV. However, when it comes to rental property, the MRV is decided according to the rental agreement.
Calculation of commercial GHMC property tax
When calculating property tax for commercial properties, the MRV is determined by considering various factors like taxation zone, type of construction, and property usage. Moreover, exemptions are made from the annual rental value of the property for building repairs.
The annual GHMC property tax formula for commercial properties is expressed as, Annual commercial property tax = 3.5 × plinth area × MRV in Rs. per sq. ft.
Remember that if you remodel your property to add an extra room or an entire flow, the property tax increases.
Rebates and penalties applicable to GHMC tax payments
- As with any other form of taxation, GHMC property tax has due dates and penalties for delayed payments. July 31st and October 15th are the last dates for the payment of half-yearly property tax
- If you miss this deadline, then you are penalised 2% on the property tax for every month you delay the payment
- GHMC encourages property owners to pay property tax and collect arrears on time by awarding cash rewards via a lucky draw to owners who pay property tax before the due date
GHMC property tax new assessment
- To assess a new property, you have to apply along with documents such as an occupancy certificate and a sales deed to the Deputy Commissioner of property tax
- Once submitted, the property will undergo physical inspection by the appointed Valuation Officer, Tax Inspector, or Assistant Municipal Commissioner
- They will also check and verify the legality of the title deed of the property along with other property documents
- The property tax for the real estate will be assessed either as per the current tax rates for residential properties or fixed rate for commercial and other types of properties
- On completion, your property is allotted a distinctive property tax identification number (PTIN) and a new door number
Furthermore, you can conduct a self-assessment of your property online as well. For online self-assessment, submit the new assessment application online with necessary details such as your Occupation Certificate and Building Permission numbers and those pertaining to usage, locality, and nature of the building. Based on these details, an estimated figure for property tax is displayed. The online application is then forwarded to the respective Deputy Commissioner, after which a Tax Inspector or Valuation Officer visits the property to inspect it physically. After inspection, the applicable tax rate is levied, and you will be allotted a unique PTIN.
Process for payment of GHMC property tax
A unique PTIN is issued to every property owner. The new PTIN is only 10 digits long, 4 digits shorter than before. Using your PTIN, you can pay your property tax online.
Steps for online payment of property tax
You can easily pay property tax online by following the steps given below:
- Log on to the official GHMC online payment portal
- Correctly enter your PTIN into the field and click on the tab ‘Know Your Property Tax Dues’
- They will also check and verify the legality of the property's title deed along with other property documents
- Check all the details displayed on the screen, such as property tax, and adjustments and select one of the payment options
- Enter the necessary details on the payment gateway page and complete the transaction
Offline payment of property tax
You can also pay your GHMC tax offline by drawing a demand draft or cheque in favour of ‘Commissioner, GHMC’ and depositing it at one of the State Bank of Hyderabad branches, citizen service centres, MeeSeva counters or with a Bill Collector.
Exemption/ concession from property tax payment
- If the property falls under any of the following categories, you are exempted or enjoy a concession on GHMC tax.
- If the property is owned by a charitable organisation, religious order, government-recognised school, or an ex-serviceman, then it is exempted from property tax
- If the property is not occupied, then you enjoy a concession of 50% on property tax, as per the Tax Inspector’s report
- If the MVR of your property is below Rs. 50, then you are exempted from paying GHMC tax
Now that you have understood all there is to know about the GHMC Hyderabad property tax, pay the tax on time and avoid undue scrutiny and fines. Apart from making you a law-abiding citizen, paying your property taxes on time makes you eligible for a loan against property from renowned lenders like Bajaj Finserv.
With this loan, you get access to a high loan amount of Rs.5 crore, or higher that you can easily pay over a flexible tenor ranging from 2 to 18 years. You can use the money from this loan to finance your children’s higher education overseas, a wedding or even consolidate debt.
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