Also known as House tax
Each city sets its own method: annual rental value, capital value or a unit area value per sq ft adjusted for location, use, age and type of construction. Mumbai uses a capital value system, Bengaluru a unit area value system, and many cities offer rebates for early payment, women owners or senior citizens.
Unpaid property tax is a charge on the property and passes with it, so buyers ask for the latest paid receipts. After a purchase, the owner updates the municipal records (mutation or khata transfer) so bills come in their name.
Owners letting out a flat usually keep property tax as their own cost; it is deductible from rental income under the income tax rules on house property.
Example
A buyer purchases a 1,000 sq ft flat in Bengaluru for ₹95 lakh. Before registration, the lawyer asks for property tax receipts for the last three years and finds one year unpaid, about ₹7,000. The seller clears it, and after registration the buyer applies for khata transfer so the next bill comes in her name.
Figures are illustrative, not market rates.
Across India
- Mumbai (Municipal Corporation of Greater Mumbai): capital value based.
- Bengaluru (Bruhat Bengaluru Mahanagara Palike): unit area value based, with A-khata and B-khata records.
- Delhi: unit area method under the municipal corporation.
Questions about Property tax
Who pays property tax on a rented flat?
The owner, unless the agreement says otherwise. Property tax is an owner’s liability, and owners can deduct municipal taxes they actually paid from rental income when filing income tax.
How do I find out how much property tax is due?
Through the municipal body’s website or office, using the property ID on an old bill. Most large corporations, including Mumbai and Bengaluru, accept online payment and show dues.
Sources
Reviewed