Five Things to Know About Residential Property Tax Payment

Things to Know About Residential Property Tax Payment

The taxes collected by GHMC are used for repairing roads, construction of footpaths, public toilets, and maintenance of public areas, parks, playgrounds, and so on.

Property tax is one of the many taxes GHMC receives from the property owner. It is a tax levied on houses and apartments. The owner pays the tax notwithstanding whether it is self-occupied or rented out. It is mandatory to pay property tax every year.

Five Things to Know About Residential Property Tax Payment:

Who has to pay property tax?

Any person who owns a residential property has to pay property tax. GHMC also charges property tax on property used for commercial purposes.

How do you calculate residential property tax?

GHMC calculates property tax based on the area of the property, location, type of construction, and so on. GHMC website has a calculator that displays the approximate amount of property tax due if you enter details of the property.

To calculate the residential property tax:

  1. Calculate the plinth area of your property. The plinth area is the total built-up area which includes balconies and garage space.
  2. If your property is self-occupied, calculate the monthly rent per sq. ft.  of similar properties in your area.
  3. If your property is rented out, calculate the monthly rent per sq. ft as per your rental agreement.
  4. Use the below formula to calculate property tax. Property tax = plinth area * monthly rent per sq. ft. * % of tax (as per GHMC) - 10% depreciation + 8% library cess.

How do you pay property tax?

GHMC collects property tax payments online in any of the following ways:

  1. Online tax payment through net banking.
  2. 72 Mee-Seva centers in GHMC limits.
  3. Citizen Service Centres in all 19 circles of GHMC.
  4. GHMC Head Office.

How do you pay property tax for new residential properties?

To assess a new property, you can either submit the details online or offline.

In the case of offline submission, you must submit your application to the Deputy Commissioner. The list of documents you must submit are as follows:

  1. Registered Sale Deed/ Gift Deed/ Partition Deed.
  2. Link documents attested by a gazetted officer.
  3. Copy of building sanction plan.
  4. Occupancy Certificate

In the case of online submission, please refer to a video that explains how to submit the self-assessment online here.

After receiving the request (online or offline), a tax inspector inspects the property, verifies the documents, and levies the tax. Then, the applicant gets a unique Property Tax Identification Number (PTIN) with a new house number.

Early Bird Offer by GHMC

GHMC is giving a 5% discount on property tax if you pay by 30 April 2018.

The property tax is a tax charge that is made by municipalities on citizens who have a property or real estate. To do this, each property whether rustic, vacant or with construction (residential housing or any other type) must be registered. so that all land in the city will be registered in the municipal system and therefore may be charged to its owner.

In this book of ideas, we talk a little about this tax so that you know its function, its destiny, and other details.

Destination of the Tax

The property tax is levied to be used in the services and infrastructure of the municipalities, such as lighting services, paving, garbage collection, patching, road painting, etc.

When your municipality collects the tax on all properties throughout the year, this balance should be reflected in better services in the locality. If there is a low payment or a large part of the population does not comply with it, the services are deteriorated since they can not be paid in full or cover all urban needs.

Many times we do not see this tax reflected in the infrastructure services of our city: there is not enough lighting, the streets are very deteriorated or there is no garbage collection in certain areas. At that time we must, as citizens, approach the municipal government to inform us about the fate that is being given to this tax, who are the biggest debtors and how much income increases. 

Annual Charge

The property tax is calculated annually but can be paid in a single exhibition throughout the year

There is also the possibility of paying with a discount: in some municipalities of the country, the first months are offered discounts in the annual payment or surcharges if there are debts from previous years, to encourage the population to make the payment. Likewise, there are benefits for seniors, retirees, and pensioners.

Calculation of the Tax

Each year that the Income Law of each municipality is published, a list of rates or rates of payment per land per square meter is established, depending on the use thereof. That is, for housing purposes or land with housing construction, a certain rate is defined, for vacant lots, another tariff is defined, for land for industrial use is another different rate, etc.

When it comes to formal subdivisions duly registered with housing construction, the rate is already given in the same publication, but when it comes to land that is registered as uncultivated, it is necessary that keep up to date the use that the property has, for change the rate when a construction is made or change of use. These values are the basis for the calculation of the total value of the land, according to the location and the dimensions of it.

To know how much you will have to pay for your property, you can consult the Income Law of your municipality and look for the colony or fractionation where your property is and read the instructions for the calculation of the total area. But practically every municipal government, on its official website, has software for online calculation, so right there you can calculate it, you only need the cadastral key of your land, which is specified in the deeds, in the previous receipts of the tax or on the electricity or water bill.

Values that Define the property

The amount assigned to each property in the Income Law is defined based on the cadastral values of each location and the construction conditions, according to the type of the same and the urban and infrastructure services of the context.

The elements that intervene for the definition of these values are the conditions of infrastructure and urban equipment in a certain number of blocks, the type of real estate that exists there, the real estate dynamics, the roads and the type of transit of the same, the activities of the area, access to and from the roads and the commercial value of the area.

As for construction, the factors taken into account are the type of property: residential or commercial, the number of floors or levels, the surface area of both the land and the construction and the antiquity of it.

Where to Pay the Property Tax

In the offices of Municipal Revenue Collection, some municipal portals also offer the option of online payment by card, or in the assigned banks, but for this, you need the printed receipt either from the website, if the service is offered, or directly printed at the Collection offices.

Owning a house implies many responsibilities; One of them is paying the taxes that correspond. These vary depending on the state and jurisdiction, but there are certain general data that you should know if you have a property. Look at the below points.

You can be fined for not paying

What happens if you do not pay property taxes? Penalties vary by city and state but, eventually, you could lose your home.

You can pay them by credit card

However, does it suit you? Payment processors charge rates of 2 to 3% on credit card transactions, explains the portal. If the value of the tax is high, this could have a big impact on your pocket.

You can get a federal tax reduction

Owning a house had to have some advantages. You could get deductions, credits, and tax refunds when you file your annual return. This exemption can lower your property tax debt and even lead you to get a refund.

Not everyone has to pay them

You should find out if a property tax exemption is available to you if:

-- you have a disability, 

- you are over 65 and you do not have important income, 

- your income is low, 

- you are a farmer.

You could pay your taxes with the guarantee deposit

Many mortgage companies cover property taxes with the escrow account you finance. They pay 1/12 of your total taxes every month, with your mortgage payment. Remember to check from time to time if these payments are actually being made.

If you are one of those who bought a house and have some doubts about how you should pay the property tax. Read on the below points

Who should pay the unified property tax? 

The owners, and possessors of real estate located in the city. In the event that the properties belong to several people, the presentation of the declaration by each one releases this obligation to the others, independently of the responsibility of each one for the payment of the tax, the interest or sanctions in proportion to the quota part or right they have on the property.

What happens if the suggested form or the receipt of the Simplified Payment System (SSP) of the property tax shows an error in the real estate registration? 

You can request the change of the SSP invoice with the corrected data, attaching a copy of the tradition certificate stating the correct registration. Additionally, it is important that the correction of the information is made in the Special Administrative Unit of the District Registrar if this is the case. 

What happens if the suggested form or the SSP receipt of the property tax has an error in the identity card?

You can request the change of the invoice with the copy of the identity card of the owner and in the case of the suggested form, go to website section Taxes online, access the property tax adjuster and register the ID number to carry out the settlement and generate the declaration for payment in banks, or request a new settlement with the corrected identification number, attaching the copy of the owner's ID. In any case, you must verify that the information is corrected before the Special Administrative Unit. The change of name must be processed before the Special Administrative Unit of the District Registrar, attaching a copy of the certificate of tradition, stating the correct or current name of the owner.

What happens if the suggested form or the SSP receipt of the property tax shows an error in the address? 

First of all, it must be verified if the address that was registered in the suggested form or in the SSP receipt is the same address that appears in the registration process. If so, it means that this is the official address with which you must present the declaration or receipt of payment. Otherwise, you can request the suggested form change or the SSP receipt

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By: Shailaja K