Introduction
On February 21, 2024, the Karnataka government approved the Brihat Bangalore Mahanagara Palike (BBMP) Bill to reduce the tax burden on property owners in Karnataka. The passage of the bill has brought significant relief to home owners in Karnataka. Penalty for unpaid property taxes has been reduced by 50 percent.
Table of Contents
- What is the Bangalore Property Tax 2024?
- How is Property Tax Calculated in Bangalore?
- Old Bangalore Property Tax Rates in as Per Zones
- New Bangalore Property Tax Rates in 2024
- Impact On the Property Tax in Bangalore
- Bangalore Properties Have Increase in Value
Penalties for non-payment of property tax on time. But if the payment is made on time, the concessions will be waived. This exemption is aimed at reducing the financial burden on those who are already struggling to survive. It also seeks to prevent further marginalization and disenfranchisement of vulnerable populations.
Through the waiver of these subsidies, it is expected that people from disadvantaged communities will have better access to essential services and resources. This waiver will help break the cycle of poverty and improve the quality of life of those in need. The recent bill also included a five-year cap on property tax penalties on residential and mixed-use properties.
What is the Bangalore Property Tax 2024?
Bangalore Property Tax is calculated based on the annual rental value of the property. The tax rates vary depending on the zone and type of property. Property owners in Bangalore are required to pay property tax annually to the Bruhat Bangalore Mahanagara Palike (BBMP). The tax rates can range from 5% to 20% of the annual rental value. Commercial properties are typically taxed at a higher rate than residential properties.
BBMP is the administrative body responsible for civic and infrastructure assets in Bangalore, and property tax is one of the main sources of revenue for the municipality. Property tax is collected annually from property owners based on the value of their properties. The revenue generated from property taxes is used to fund various public services and infrastructure projects in the city. BBMP also uses property tax revenue to maintain roads, parks, and other public amenities.
Property owners can avail of certain exemptions or discounts on their property tax payments. These exemptions or discounts are usually offered to old citizens, disabled individuals, or those owning properties of historical significance. The BBMP also conducts regular property tax assessments to ensure fair and accurate collection of taxes from all property owners in Bangalore.
How is Property Tax Calculated in Bangalore?
According to the latest released draft notification, the BBMP will do away with the zonal system of tax calculation. The change is expected to simplify the tax calculation process for property owners in Bangalore. The new system will ensure more transparency and accuracy in determining property taxes.
Section 144 of the BBMP Act, 2020 states that the removal of A, B, C, D, E zonal classification is conducive to assessment of tax based on guideline values of the property. This change will enable a more simplified and streamlined approach to property tax assessment under BBMP jurisdiction. It also aims to ensure a fair and equitable system for all property owners in the region.
Old Bangalore Property Tax Rates in as Per Zones
The Old BBMP property tax rates zone-wise in Bangalore have been revised in recent years to reflect the changing property values and infrastructure developments in different areas of the city. Property owners need to stay updated on these changes to ensure accurate tax payments.
| Zone | Tenanted (per square. feet.) | Self-occupied (per square. feet.) |
| A | Rs.5 | Rs.2.50 |
| B | Rs.4 | Rs.2 |
| C | Rs.3.60 | Rs.1.80 |
| D | Rs.3.20 | Rs.1.60 |
| E | Rs.2.40 | Rs.1.20 |
| F | Rs.2 | Rs.1 |
New Bangalore Property Tax Rates in 2024
BBMP has also proposed a new property census structure in Bangalore. It has been announced that the old zonal classification system has been abolished, along with the reduction in the penalty rate on property tax. This decision aims to simplify the tax system and reduce the financial burden on property owners. The new system will be based on a more equitable method of determining property taxes.
Earlier, property tax calculation was divided into five zonal classifications. Here A zones have a higher guideline value bandwidth. E zones were the lowest. BBMP Chief Commissioner Tushar Giri Nath pointed out that property owners in these Framework A zones have to pay higher taxes even though they have built-up areas similar to other zones.
| Residential Properties | Value per sq. ft. |
| For Tenanted Property/land | 0.2% of Guidance Value |
| For Self-Occupied Property/Land | 0.1% of Guidance Value |
| For Fully Vacant Land | 0.025% of Guidance Value |
| For Commercial/Non-residential Properties | |
| For non-residential property/Land | 0.5% of guidance value |
| For fully vacant land | 0.025% of guidance value |
Impact On the Property Tax in Bangalore
Location
The location of a property affects its value. Places with good connectivity and sound infrastructure have high value. For example, a property in a desirable neighborhood with good schools and amenities is worth more than a property in a less desirable area. Additionally, proximity to public transport, shopping centers, and major roads can also affect property value.
Type of property and its use
Property value is determined by the type of property. It can be residential, commercial, agricultural, or industrial. Its location, size, condition, and any unique features it may have. Additionally, market trends and economic factors also play a significant role in determining property value. property value is a complex combination of various factors that can fluctuate over time.
Infrastructure Development
Good connectivity and established infrastructure play a role in the value of location guidance. Proximity to both landmarks and connectivity to other parts of the city through easy public transport will influence the property value.
Bangalore Properties Have Increase in Value
From October 1, 2023, the Karnataka guidance value has increased by up to 50%. The increase will impact property transactions in the state, which may lead to higher costs for buyers and sellers. People involved in real estate transactions should be aware of these changes and plan accordingly.
There will also be an impact on property tax as stamp duty payable on modified property will be reduced to 2% in 2024 from 5% of the property value while stamp duty is payable.
| Property type | Guidance value increase |
| Agricultural land | Up to 50% |
| Sites | Up to 30% |
| Apartment | Between 5 to 20% |
Conclusion
The Brihat Bangalore Mahanagara Palike (BBMP) in Karnataka will affect property owners under the 2024 amendments to property tax rules. It will take a positive step towards reducing the financial burden, especially in Bangalore.
Announced significant reductions in penalty rates for unpaid property taxes. Demonstrates commitment to exemptions and concessions for disadvantaged groups. For more information, visit openplot.
Also read: Property Tax in Bangalore Is Going to Go Up Hugely