The Municipal Corporation of Delhi (MCD) has implemented the recommendations of the fifth Municipal Valuation Committee (MVC 5) from April 1, 2023, offering property tax relief to traders in rented non-residential accommodation, private schools, banquet halls and guesthouses.
According to senior civic officials, property tax levied on banquet halls, private schools and shops in rented premises and structures constructed in the last 12 years may come down.
According to a senior MCD official, the unit area values (UAV) of properties, determined by the city’s classification of different residential colonies will remain the same. For example, the current UAV (Rs per sqm) is Rs 630 for an category A colony, Rs 500 for a category B colony, Rs 400 for a category C colony, Rs 320 for a category D colony, Rs 270 for a category E colony, Rs 230 for a category F colony, Rs 200 for a category G colony and Rs 100 for a category H colony.
The UAV was earlier recommended to increase by 37% in August 2022. However, the recommendation was not accepted in the final MVC 5 report. As per the civic body, there may be valid reasons for an upward revision in UAV but due to the prevailing economic situation and stress as a result of the global pandemic, the committee has agreed with the stakeholders’ objections and, recommended that there be no increase in the UAV in the current scenario.
The annual value of a property in Delhi is calculated based on six factors – total covered area, unit area value (rupees per sqm), age, occupancy, structure, and use. Thus, the annual tax levy is calculated by multiplying the annual value by the property tax rate.
Changes in other five property tax calculation factors may lead to changes for specific categories. The committee has also reduced the use factor from 6 to 4 for banquet halls (baraat ghars), from 3 to 2 for schools, from 10 to 4 for cell towers, and from 4 to 2 for company trasit residences. As regards the age factor, property taxes will rise by only 0.1% to 0.2% for new houses constructed between 2010 and 2020.
In the case of the occupancy factor, the multiplicative factors for residential properties will remain the same while major relief was given for non-residential rented properties.
Further, the municipal government has simplified the structural factor. Thus, the use factors for government-owned properties such as hospitals, schools, malls, mobile towers and guesthouses will see a decrease in some categories and an increase in others.
A five-member municipal valuation committee was set by the Delhi government in November 2021. The committees authorised to make recommendations to the civic body on matters related to the classification of vacant land, properties, and colonies, and determining the base value per unit area and other factors for calculating property tax.
See also: MCD property tax rates category list, property tax calculator and online house tax payment in Delhi
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Harini is a content management professional with over 12 years of experience. She has contributed articles for various domains, including real estate, finance, health and travel insurance and e-governance. She has in-depth experience in writing well-researched articles on property trends, infrastructure, taxation, real estate projects and related topics. A Bachelor of Science with Honours in Physics, Harini prefers reading motivational books and keeping abreast of the latest developments in the real estate sector.
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