Mumbai civic body got Rs 33,274 crore in property tax, developer premium since COVID-19 hit

Other major sources of revenue for India's richest civic body include the compensation in lieu of octroi, water and sewage charges; interest on investments, and supervisions charges, which bring in over Rs 15,000 crore annually (File image fo the BMC Headquarters in Mumbai)

Mumbai’s municipal corporation, India’s richest civic body, received Rs 33,274 crore in revenue from property tax and premiums paid by real estate developers from April 2020 to December 2022, following the COVID-19 pandemic, according to its budget for FY24.

The Brihanmumbai Municipal Corporation (BMC) collected Rs 4,582 crore as property tax in FY21, Rs 5,207 crore in FY22, and Rs 3,174 crore as of December 2022 in this financial year. The total property tax collected from April 2020 to December 2022 was Rs 12,963 crore.

Also read: Mumbai Civic Body collects Rs 665 crore as property tax in first two quarters of ongoing fiscal

Revenue in terms of premiums and fees collected from real estate developers was Rs 2,107 crore in FY21, Rs 15,493 crore in FY22, and Rs 2,711 crore up to December 2022, taking the total to Rs 20,311 crore.

However, the BMC acknowledged that revenue from both sources is declining in the backdrop of COVID-19 and changes in policy decisions.

Related stories

Mehul R Thakkar

Special Correspondent|Moneycontrol

• 
  New players have entered Mumbai real estate market and we welcome their presence: Abhishek Lodha
• 
  Mumbai real estate market records 9% rise in property registrations this month
• 
  MahaRERA tells developers to declare parking space details to homebuyers

According to BMC officials, premium collection was Rs 2,107 crore in FY21 due to the slowdown caused by the pandemic. It shot up more than sevenfold in FY22 after the government announced a 50 percent waiver in 22 types of premiums paid by developers for approvals of real estate projects. The waiver was available only for one year.

“There was a feeling that collection for the next two to three years will go down drastically, but in the ongoing fiscal we have managed to collect Rs 2,711 crore and we still have time till March to meet our estimated collection of Rs 3,950 crore,” municipal commissioner and BMC administrator Iqbal Singh Chahal said.

Also read: Mumbai civic body extends instalment facility for premium payment by developers until 2025

Property tax collections are estimated at Rs 6,000 crore in FY24, which is Rs 1,000 crore lower than the estimate in the budget for FY23.

“When we are talking about the decrease of income from property taxes, we can observe two prime reasons. Firstly, exemption of property tax to residential user category having carpet area up to 46.45 square metres (500 square feet) and secondly, the revision in property tax is due since 2020-21. However, due to COVID-19, the same was deferred during 2020-21 and 2021-22, and then 2022-23.”

Also read: BMC announces 100 percent relief on property tax for flats measuring 500 sq. ft

According to the BMC, its other major revenue sources include the compensation it gets from the state government in lieu of octroi that was abolished after the introduction of the goods and services tax (GST); water and sewage charges; interest on investments, and supervisions charges, which bring in over Rs 15,000 crore annually.