Karnataka to increase property tax in urban areas, excluding Bengaluru

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The Karnataka Cabinet on Wednesday decided that property taxes across all municipalities except Bengaluru will be hiked. This was done with the Cabinet, led by Chief Minister BS Yediyurappa, deciding to tweak the  Karnataka Municipal Corporation Act, 1976. It may be recalled that Bengaluru, which was earlier under the purview of  Karnataka Municipal Corporation Act, 1976, is now governed by the recently passed Bruhat Bengaluru Mahanagara Palike Bill, 2020.

Reports said that currently, all residential and commercial property in the state are being taxed between 0.3% and 1% of the guidance value and the Cabinet has decided to hike it up to 0.5% and 1.5 %. While 50% of the guidance value of the property is considered capital value for tax calculation now, reports suggested that now it will be changed to 25% of guidance value. Further, vacant sites which are now exempt from property tax will be subjected to property tax with these new changes. 

Speaking on this, Law and Parliamentary Minister JC Madhuswamy, said that these changes in the state’s tax structure have been done according to the Union government’s guidelines. By making this change, he said the state government will be able to borrow another 0.25% of the state’s gross domestic product.

He also added that union government guidelines have also suggested that the user fee of the properties be also hiked. But the state government is not going to change that for the time being.

This decision by the state government comes after it had recently approved a 2% ‘road transport cess’ on their property tax in Bengaluru. 

In other decisions taken in the cabinet meeting, Rs 5 crore will be spent to deal with a severe shortage of police quarters. A 325-ft bronze statue of Basaveshwara will also come up in Chitradurga district in n Murugharajendra Mutt.