A “property” refers to any tangible real estate that a person owns, including buildings and plots, including the ones that have been rented out to third parties.
Any individual possessing a property is obliged to pay a certain amount to the government for their asset every year or every half a year.
A property can be generally categorised into four types:
The government charges tax for each type differently.
In India, Property Tax is recognised for plots and constructions within the plots. The tax is charged in proportion to the monetary value of the property and is used for the development of public properties and amenities. Property tax also changes from one locality to another.
Property Tax = Base Value X Built-Up Area X Age Factor X Type of Building X Category of Use X Floor Factor
Generally, the following factors are determined before the calculation of property tax:
The determination of these parameters helps the authorities to decide what method to use for the calculation of property tax.
The property tax is calculated as a percentage of the market value of the property. The market value varies according to the location.
The property tax is calculated as per the unit price of the built-up area of the property. The expected returns from a property decide its price. This price is multiplied by the built-up area of the property.
The annual rent collected from the property is valued by the authorities based on the location, size and condition of the property and the property tax is determined accordingly.
Payment of property tax is not as tedious a task as it used to be. Most municipal corporations now provide the provision for the payment of property tax on their websites.
The options to choose the category of property, the year for payment of tax etc. are readily available on most websites now.
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