TNS

The rationalised property tax regime by the Haryana Government has sent lakhs of property owners, especially apartment owners, into a tizzy. In fact, the “irrational illogical” property tax formula has earned the ire of the apartment owners, including the cooperative housing society members. All of them have alleged that they have got a raw deal at the hands of Hooda government vis-à-vis the independent house owners.

Skewed rationalisation

A look at the property tax rates makes clear that the grouse of apartment owners is justified. “An independent house owner having a plot area of 300 square yards in A-2 cities will pay property tax at the rate of Re 0.75 per square yard, which comes out to Rs 225 per year. However, a person owning a flat having a carpet area of 1,400 square feet will be required to pay property tax at Re 0.75 per square foot, which works out to Rs 1,075 per year,” alleged S.K Aggarwal, general secretary of the Joint Action Committee of Cooperative Group Housing Societies, Panchkula.

And to rub salt into their wounds, Aggarwal alleged that they were not given a personal hearing by the Surjewala Committee formed by the Haryana Government to rationalise property tax, resulting in the current anomaly. In fact, the new property tax regime had sparked off widespread resentment among flat owners, he alleged.

Double whammy

“In fact, it is a double whammy for flat owners as they were also supposed to pay for maintenance of streetlights, power transformers, water supply and internal road network”, adds Aggarwal. The independent house owners are not supposed to pay for these civic amenities and the civic authorities are supposed to maintain these amenities in the case of areas having independent houses.

The formula

The Haryana Government recently came out with the new property tax formula on the recommendations of the high-powered committee headed by Parliamentary Affairs Minister Randeep Singh Surjewala.

The notification approved the slab system and divided municipal corporation towns into two categories, A-1 (Gurgaon and Faridabad) and A-2 (Ambala, Panchkula, Karnal, Panipat, Rohtak, Hisar and Yamunanagar). Towns having municipal councils and municipal committees were categorised as B and C, respectively.

The state government recently notified the property tax under which residential and commercial plots up to 100 square feet (500 square yards for industrial/institutional properties) were exempted from the tax. A tax of Rs 0.50 per square yard has been levied on property owners in A-1 cities (Gurgaon, Faridabad) and Rs 0.375 per square yard on vacant residential property owners in other municipal corporations in the state for plots measuring 101 to 500 square yards. The tax rate for residential plots measuring 501 square yards and above would be Re 1 and 0.75 per square yard for A-1 and A-2 cities, respectively.

For commercial plots, the rate would be Rs 5 and Rs 3.75 per square yard for A-1 and A-2 cities, respectively. An amount of Rs 2 and Rs 1.5 per square yard would be charged from the owners of industrial/institutional plots measuring 501 square yards in A-1 and A-2 cities, respectively.

For Class B cities (municipal councils) an amount of Rs 0.25 per square yard would be charged while Rs 0.20 per square yard would be charged in Class C cities (municipal committees) for plots from 101 square yards to 500 square yards. The property tax would be Rs 0.50 and Rs 0.40 per square yard for Class B and Class C cities, respectively, for plots measuring 501 yards and above.

For commercial property, the tax at Rs 2.5 per square yard (Class B cities) and at ~2 per square yard (Class C cities) would be charged for plots above 501 square yards. The owners of the institutional/industrial plots would have to shell out ~1 and ~0.80 per square yard from plots measuring beyond 501 square yards.

Meanwhile, for the residential plots up to 300 square yards, an amount of Rs 1 and Rs 0.75 per square yard would have to be paid in A-1 and A-2 cities, respectively. The rate for Class B and Class C cities would be Rs 0.50 and Rs 0.40 per square yard up to 300 square yards. For plots from 301 square yards to 500 square yards, the rate would Rs 4 (A-1 cities) and Rs 3 (A-2 cities). For 301 to 500 square yards, the rate would be Rs 2 (Class B cities) and Rs 1.6 per square yard (Class C cities).

Similarly, for apartments up to 2,000 square feet, the property tax rates would be Rs 1 per square feet (A-1 cities) and Rs 0.75 per square feet (A-2 cities). The rate would go up to Rs 1.2 per square feet (A-1 cities) and Rs 0.90 per square feet (A-2 cities) in case of flats from 2,001 to 5,000 feet. In case of flats up to 2,000 square feet, the rate would ~0.50 (Class B cities) and Rs 0.40 (Class C cities). For flats in the category of 2,001 to 5,000 feet, the rate would be Rs 0.60 (Class B cities) and Rs 0.48 per square feet (Class C cities).

As far as commercial property was concerned, a rate of Rs 24 per square yard (A-1 cities) and Rs 18 (A-2 cities) would be charged for shops up to 50 yards. For shops from 51 to 100 square feet, the rate would go up to Rs 36 (A-1 cities) to Rs 27 (Class-2 cities). In Class B cities, the rate would be Rs12 while it would be Rs 9.60 per square yard in Class C cities for up to 50 square yards. In case of property from 51 to 100 square yards, the rate would Rs 18 (Class B cities) and Rs 14.40 per square yard (Class C cities).

The property tax was scrapped in 2010 by the Congress government. As a consequence, the Central Government stopped the release of Central grants. The Hooda Government would now be eligible to get Central grants amounting to over Rs 750 crore.

Pay arrears

In a clear bid to mop up resources, the state government has brought the vacant plots within the tax ambit. Besides, the property owners will have to pay arrears of the property tax with effect from April 1, 2010.

Exempted categories

100 per cent rebate to the religious properties, orphanages, almshouses, municipal buildings, cremation or burial grounds, dharamshalas, Central and state government educational institutions and government hospitals.
100 per cent rebate would be given to the self-occupied residential houses up to 300 square yard owned by serving and retired defence and paramilitary personnel or his/her spouse, families of deceased soldiers/ex-servicemen/ex-Central paramilitary forces personnel.
100 per cent rebate to the self-occupied residential houses owned by freedom fighter or his/her spouse and war widows.
Similarly, 50 per cent rebate would be given to the state government buildings(other than buildings of boards/corporations/ undertakings/ autonomous bodies.

Fact sheet

-Apartment owners up in arms against new irrational property tax formula
-Apartment owners to pay much more tax than freehold property owners
-Cooperative housing societies not given personal hearing by Surjewala Committee
-Apartment owners urge the CM to hold property tax notification in abeyance

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