Property tax is the tax levied on all the residential and non-residential (commercial) properties that are situated in the limits of Municipal Corporation. For the city of Hyderabad, Greater Hyderabad Municipal Corporation (GHMC) handles the responsibilities of property taxation and collection for all those properties that fall under the limits of GHMC.
Property tax is one of the main sources of revenue for GHMC. For the taxation of the property, the property owners need to register with GHMC and the assessments are made based on the physical dimensions and other parameters of the property.
Though the property tax is levied on all the non-agricultural lands, buildings, and structures with land, the tax rate vary based on the type of usage of the property. However, few properties can get tax exemptions/concessions which are listed below.
- 100% exemption for properties owned by serving or Ex-service men
- Religious places of worship, charitable institutions are completely exempted from the tax
- Any residential building occupied by the owner whose annual rental value is not more than Rs.600 may be exempted from the tax
- 100% exemption for the recognized educational institutions (up to X std.)
- 50% vacancy remission would be granted for the vacant premises on field report submitted by the tax inspector
Rate of property tax
- For residential buildings the slab rates of taxation are being adopted
- Whereas for the commercial properties, property tax is levied 30% on Annual Rental value (ARV) of the property
Property tax calculation procedure
The property tax is calculated differently for residential and commercial properties based on the Annual Rental Value (ARV) of the property.
Tax calculation for residential properties: For residential buildings, since the slab rates of taxation are being used, an elaborate procedure for determining the Annual Rental Value (ARV) and for assessing the property tax will be followed. For your convenience it is explained in a simple way as follows.
Step 1: The Plinth Area (PA) of your property/building should be measured. The PA is nothing but the total built up area, which includes the covered balcony, all covered area including the garage area. For more information about Plinth area and others, click here.
Step 2: As the next step, the market rent per square feet per month should be determined. If self-occupied, the prevailing market rent per square feet per month for similar properties in the vicinity should be considered.
If rented out, the rent obtained per sq. ft. per month (based on Rental Agreement) should be considered. If the rent obtained is low, the prevailing market rent for similar properties can also be taken. This will give Monthly Rental Value (MRV) per Sq. ft.
Step 3: Using those two values the property tax payable may be calculated as:
|Annual Property Tax for residential property = PA X MRV per sq. ft. X 12 X (0.17 – 0.30) depending on the monthly rental value (from the table) – 10% depreciation + 8% library cess|
|Range of Monthly rental value||General Tax||Conservancy tax||Lighting tax||Drainage tax||Total|
|Up to Rs. 50/-||Exempted from payment of property tax|
Tax calculation for Commercial properties: Unlike residential property tax calculation, the calculation for commercial properties is simple and less complicated as the tax rate is fixed.
Just like the above process the PA and MRV should be known in order to calculate the tax. However, in this case the MRV of for your property shall be obtained from the notification issued by GHMC for the monthly rent fixed per sq. ft. of plinth area for different circles in various taxation zones. This information is available in the GHMC web page (http://www.ghmc.gov.in/tax/proposed_div_zones.asp)
The MRV for your property may vary based on different factors like location of building, type of construction, nature of usage, age of building, etc.
After getting the values of PA and MRV, the tax can be calculated using the formula:
|Annual Property Tax for commercial property = 3.5 X Total Plinth Area In sq. ft. X Monthly Rental Value In Rs./sq. ft.|
You can also calculate your property tax online by visiting GHMC web page http://www.ghmc.gov.in/tax/calculationofpropertytax.asp/ (or)
You can also check your property tax dues using the link
Maximum and minimum taxes
- Commercial property taxation for ATMs and cellular towers/hoardings is observed to be charged at the maximum with monthly rent of Rs. 70 and Rs. 50 per sq. ft. respectively.
- Whereas educational institutions/hostels and hospitals are charged with minimum taxes with a monthly of Rs. 8 and Rs. 9.50 per sq. ft. respectively.
Continue reading on:
Where to Pay GHMC Property Tax