PROPERTY TAX REFORM
G.V.SATYA NARAYANA REDDY
MBA - IFM
• Bangalore is the capital of the State
• Legend has it that the name
Bangalore comes from the Kannada
word “Benda Kaluru” (boiled beans).
• Silicon Valley of IndiaBangalore is
one of the fastest-growing Indian
metropolises after New Delhi.
Bangalore City Corporation (BCC) as it
was earlier called was established in the
year 1949 by merging two municipalities,
• „The City Area‟ and
• „The Cantonment Area‟
• Bangalore Mahanagara Palike came to
be called Bruhat Bangalore
Mahanagara Palike (BBMP) from16-01-
BBMP has followed decentralized administration at the 8 Zonal
Functions assigned to them :
a. General Administration
b. Revenue Department
c. Engineering Department
d. Health Department
e. Horticulture Department and
f. Education Department.
Property tax administration is decentralized with the
respective zonal heads responsible to achieve the annual
target of tax collection.
Overview Of Finances
Octori being abolished in the year 1979,
Main source of revenue to BBMP
-Property Tax and
-Grants from the State Government
significant gap in the revenue receipts and
Properties are classified into the following categories
(a) rented properties
(b) owner-occupied properties and
(c) special category that are exempted from property tax.
Assessment of Property
A zone Re.0.50
B Zone Re. 0.40,
C Zone, Re.0.30,
D Zone, Re.0.25,
E Zone Re.0.20 and
F Zone Re. 0.12
Billing and Collection
The property tax is payable in two installments.
The first installment is due by 30th of May and the second
installment by 30th October.
If the tax is not paid by the due date a demand notice is
served on the owner to discharge the tax due with15 days
failing which recovery action will proceed.
Bangalore Municipal Corporation: Selected Measures of
Property Tax Revenue performance
Monitoring tax collection
Each Zone maintains a demand collection and balance (DCB) register.
This collection register is being computerized. The payment that is made at
A defaulters list is prepared at the zone level and regular meetings are held
to review the collection.
• Government Buildings
Reforming the system
• Zoning of The City
For assessment purposes, the city was divided into six land value
The zone classification referred to a land value category
• Category of properties
Distinction in the assessment residential and non-residential use of
Residential use of property : 5 categories
Non-residential uses : 11 categories.
The expected rents for the category of usage depending on their zone
were pre-determined for rented and self-occupied properties.
The property tax payable under the self-assessment scheme is
a two-line formula driven calculation depending on the location
as under (for residential property):
While the same formula was applicable for non-residential properties in Group A.
The formula for hotels,
hospitals, industries :
Where rv is ratable value, ba=Built-up area, (75% area @ full rate) r= rental
rate fixed/sft/month m=months, t1 = total 1 r/2 (25% area @ 50% of the rate)
d=depreciation, t2=total 2, t3=total 3, pt =property tax, and 20% = Tax rate).
The scheme provided for deprecation for the age of the building
APPRAISAL OF THE TAX REFORM
• tax reform should address some of the
• Is the tax understandable?
• Does it need to be simplified?
• Does the reform measure make any sense
to the taxpayer?
• Does the taxpayer understand the procedure
to pay the tax under the reform measures?
• Is the tax burden distributed fairly?
ACCEPTANCE OF REFORM
• The Corporation was sensitive to the need for popular
support for these changes.
• An education program was part of the marketing plan for
• City officials met with various interest groups to convince
them that the benefits of this program would outweigh the
increase in their tax.
• The following are some of the steps that helped in gaining
MARKETING SAS 2000
• Informative brochures were printed not only in English and
• Meetings with Resident Welfare Associations & Trade
• Information through Press Media
• Tax payments tend to be done over the last two to three
days, so count down advertisement were issued
BENEFITS OF THE SYSTEM
• The division of the city into zones was in effect to revalue properties on
an annual rental base
• This revaluation helped in the buoyancy of property tax overtime
• Several properties in the lower end of the zones fixed during SAS 2000
would move upwards to higher zones
• The objective of the SAS was simple and straightforward - to get
property owners to voluntarily declare their property tax liability and to
make timely payment.
• City Corporations in the country who have shifted to an area-based
system of property tax, there has not been even a single instance of
revision of the values
• In Bangalore there is an Ordinance issued by the Government to revise