Delhi, Bengaluru lag other metros in property tax collection

Property taxes are lower in Delhi and Bengaluru than Mumbai

Delhi and Bengaluru, which have one of the priciest real estate, collect the least in property taxes compared with other metro cities, a Moneycontrol analysis has found.

The national capital and India’s tech capital garnered just 0.3 percent of their GDP in property tax in 2022-23 against the OECD average of 1.1 percent.

None of the Indian metros have been able to reach the level of the Organisation for Economic Cooperation and Development.

India’s richest metro, Mumbai, could collect only 0.4 percent of its GDP in property taxes, while Chennai and Pune managed 0.5 percent each.

On February 24, Municipal Corporation of Delhi (MCD) announced another waiver. If a person pays their property tax for the current fiscal year, those with houses built in less than 100 square yards would be exempt from all past dues and those owning land between 100 and 500 square yards would receive a 50 percent rebate.

The MCD is controlled by the Aam Aadmi Party, which recently lost the Delhi assembly election after ruling the capital for a decade. The waiver follows the One Time Settlement scheme, the previous BJP administration announced in 2022.

A common miss

In addition to collecting lower taxes, another common feature has been the inability to gauge the quantum of collection.

In 2023-24, MCD set a target to collect Rs 4,300 crore in property tax but could only manage Rs 2,137 crore.

The situation was no different a year earlier. The administration set a target of Rs 3,850 crore but ended up with only Rs 2,417 crore.

The misses for other cities such as Bengaluru and Mumbai have been lower.

Bengaluru projected Rs 3,750 crore in property tax in 2023-24 but got Rs 3,000 crore. In 2022-23, it could collect Rs 2,397 crore against a target of Rs 3,520 crore.

Mumbai collected Rs 4,856 crore in 2023-24 against a target of Rs 6,000 crore.