GHMC Property tax is paid by the property owners which are charged by the state of Andhra Pradesh for the upkeep of civic amenities such as school, roads, garbage disposal and so on.
GHMC Property tax is the amount of money a denizen of a city under a municipality under a state government has to pay for the civic amenities provided to them. These civic amenities include school, roads, garbage disposal, drainage system, water supply, etc. This amount is collected by the local municipality of a town or city, so the amount may vary and also the kind of service. The computation of amount also varies from place to place.
If your property is in the city of Hyderabad and the Greater Municipal Hyderabad Corporation is the municipality, you should pay GHMC property tax. We are going to discuss various dimensions of GHMC house tax and how you can plan your property tax payments.
Introduction to Property Tax
A property tax is imposed by a State government on the people owning property. It comes under the category of direct tax and is collected by the municipal corporation of a city or a town. This tax is applicable on residential buildings including apartments, bungalows, row-houses or single unit houses. It is also applicable to corporate buildings or office buildings of corporations, both public and private.
This tax is imposed on any tangible asset an owner owns. Property tax is an important element in the economy of a state because this direct tax is a source of income or revenue for the municipal corporation and the government. The income is utilized to construct roads, drainage systems, pipelines, planting trees, improve infrastructure such as light posts, parks, gardens, libraries, dispensaries, etc. a property owner pays the tax annually and the calculation and computation of taxation are based on various factors such as the value of the property, the state of India it is in, locality, and so on.
GHMC Property Tax
A citizen who owns a property in Hyderabad, he or she will be in the jurisdiction of GHMC or Greater Hyderabad Municipal Corporation. You have to pay GHMC Property tax annually. For a resident of Telangana too, GHMC Property tax is charged. To be sure of tax calculation for property you can avail of tax calculator which is available at the GHMC official website. To calculate exact property tax, all you’ve to do is add relevant details of the property. The calculator will calculate an estimation of the tax payable by you. One should keep in mind that the property tax is computed based on the annual rental value of the property.
GHMC Property Tax calculation formula
GHMC Property tax is imposed on different entities. It is imposed on commercial and residential properties differently; hence it has different computation methods for the two types.
Calculation of Residential GHMC tax
You should understand a few basics about the parameters to calculate property tax for residential buildings:
What Plinth area consists of:
Plinth area includes the total built-up area including corridors and balconies.
GARV: Plinth area X Monthly Rental Value in Rs per sq. ft. X 12
The annual GHMC tax can be expressed as:
Annual residential property tax = GARV X (Slab rate-10% depreciation) X library cess
For making the model of taxation, GHMC uses slab rate model of taxation. This model is applied for residential properties. In this case, the slab rate varies between 17% and 30% and it depends on or determined by the MRV or Monthly Rental Value. It is ascertained by the GHMC.
There is one important point worth noting. If the property you own is occupied by you, the MRV of similar property in the area is considered to calculate GARV. But, if it is a rented property, the MRV is decided according to the rental agreement. While calculating commercial GHMC property tax, the MRV is determined by various factors. These factors are the zone of taxation, the kind of construction done; the use of property, etc. there is provision for the exemption for building repairs. Now let us have a look at the formula for commercial properties. It is expressed in this way: Annual commercial property tax = 3.5Xplinth area XMRV in Rs per sq ft. if the property adds on an additional room, the tax will also increase.
Rebates and Penalties for GHMC tax payments
There is a due date for payment of taxes and if the due date is not met for payment of taxes, the penalties will be imposed for delayed payment. There are half-yearly property tax dates that fall on July 31st and October 15th. If there is a delay in payment, there will be a penalty imposed @ 2% for every month of delay in payment. There are programs by the GHMC to encourage timely tax payments by the property owners. If they make the payments on time and they pay up the arrears swiftly and in time, there are lucky draws held for rewarding the owners with cash prizes.
The new assessment of GHMC Property tax
You have to apply for an assessment of tax for property for a newly owned property. The formality is you make an application with the occupancy certificate and the deed of sales presented before Deputy Commissioner-Property Tax. After submission of application, there will be an inspection of the property done by the valuation officer or a tax inspector. They will verify the legality of the sale deed and other property-related documents.
The property tax for real estate is assessed as per the current tax rate. There is a provision for fixing the rate for commercial properties based on the fixed prevailing rate. On completion of construction and inspection by the valuer, the property owner is given an identification number known as Property Tax Identification Number or PTIN and a door number also is given.