The Brihanmumbai Municipal Corporation (BMC) is considering a proposal to increase property tax rates by 12.5 to 13%. The proposal, which aims to revise tax rates for the first time since 2015-16, is now in the pipeline for approval. Municipal officials have indicated that the proposal will be submitted to the municipal commissioner for review before being forwarded to the state government for final approval.
The last revision of property tax rates was scheduled for 2020, but it was delayed due to the Covid-19 pandemic, political upheavals, and subsequent elections, including the 2024 Lok Sabha and assembly elections. As a result, BMC decided to defer the revision until 2025, marking the completion of a full five-year cycle, which is the standard interval for revising property taxes. At this stage, the civic body is weighing the option of linking the new tax rates to the recently updated ready reckoner rates, which the state government increased by an average of 3.39% earlier this week. Property tax collection is a vital revenue stream for BMC, and the proposed hike is expected to have a substantial impact on the civic body’s budget. For the fiscal year 2024-25, the BMC recorded its highest-ever property tax collection, amounting to Rs 6,198.05 crore, just shy of its target of Rs 6,200 crore. This figure includes an additional Rs 178.39 crore collected as penalty charges. Property tax remains one of the principal sources of income for the municipal corporation, making any changes in rates a matter of considerable public interest.
The city is divided into several administrative wards, each contributing differently to the overall tax pool. The wards in the island city, particularly the G-South (Worli) and D (Charni Road) areas, saw the highest tax collection figures, with Rs 624.50 crore and Rs 273.46 crore, respectively. On the other hand, the western suburbs, particularly K-East (Andheri East) and K-West (Andheri West), also showed strong performance, contributing Rs 568.56 crore and Rs 505 crore. In total, the western suburbs collected Rs 3,038.49 crore, while the eastern suburbs raised Rs 1,218.79 crore, with the highest contributions coming from wards S (Bhandup) and L (Ghatkopar).
The proposed increase in property taxes is likely to stir mixed reactions. While the BMC justifies the hike as a necessary step to enhance its revenue collection in line with inflation and rising civic expenses, critics argue that the increase could place a heavier burden on residents, especially in light of the city’s ongoing challenges such as rising cost of living, unemployment, and infrastructure demands. Activists have voiced concerns about the impact on middle- and lower-income groups, who may already be struggling with the high cost of housing in the city.
In response to the opposition, BMC officials have stated that the property tax revisions are intended to ensure that the city’s infrastructure remains well-funded, and the additional funds will be used for public welfare initiatives, including improved waste management, infrastructure maintenance, and the development of new civic amenities. They emphasise that the tax hike is also in line with the corporation’s efforts to maintain Mumbai’s status as a global metropolis, requiring constant investments in upgrading urban services.
The final decision on the property tax revisions will depend on the approval of the state government, which is likely to consider various factors, including the city’s current economic conditions and the possible public backlash. In the meantime, residents and property owners across Mumbai are preparing for what could be another financial challenge in an already expensive city.
