5% Tax to be levied on Residential, 6% on Commercial Properties
ABRAR MATTOO
SRINAGAR, Feb 21: The Jammu and Kashmir government has announced that it will impose a property tax starting from April 1, 2023, according to a notification issued by the Housing and Urban Development Department on Tuesday.
The notification has been drafted under Section 71A of the Jammu and Kashmir Municipal Act, 2000, and states, “The Government hereby notifies the following rules for levy, assessment, and collection of property tax in the Municipalities and Municipal Councils of Union Territory of Jammu and Kashmir and these rules shall be called Jammu and Kashmir Property Tax (Other Municipalities) Rules, 2023. These shall come into force from 1st of April, 2023.”
As per the notification, the property tax on residential properties will be fixed at 5%, while commercial properties will have to pay 6%. However, the property tax rate is subject to review. “The Property Tax shall be levied at a such percentage not exceeding 15% of the taxable annual value of land and building or vacant land or both as the Government may, by notification, from time to time specify,” the notification reads.
The notification also states that “the Property Tax assessed and levied shall be subject to revision once in three years by enhancing the tax by such percentage not exceeding 10 percent of the tax as may be prescribed, commencing from the financial year from which the Property Tax is determined.”
The Ministry of Home Affairs (MHA) had granted permission to the J&K administration in October 2020 to impose property taxes in the Union Territory through Municipal Corporations, Municipal Councils, and Municipal Committees. This was made possible with the passage of the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020, which amended the Jammu and Kashmir Municipal Act, 2000, and the Jammu and Kashmir Municipal Corporation Act, 2000.
The imposition of property taxes has been opposed by various political parties, including the BJP. However, sources indicate that the Central Government only releases significant subsidies to Urban Local Bodies if they implement the Property Tax. “The ULBs will benefit greatly from the release of these grants.”
While the Housing and Urban Development Department had been considering the plan to impose property tax in Jammu and Kashmir for a long time, sources suggest that the department may initially only apply Property Tax to commercial buildings and exempt residential structures due to opposition from various political parties and groups, including the BJP.
The previous administrations had attempted to impose property taxes in Jammu and Kashmir multiple times in the past but were forced to give in to political pressure as a result of hostility to the idea.
However, the statutes passed by the previous legislature also included provisions for the imposition of property taxes in the former State of J&K. Currently, the notification states that Property Tax would be imposed on all establishments.
“Unless exempted under this Act or any other law for the time being in force, Property Tax shall be levied on all lands and buildings or vacant lands or both situated within the Municipal area.”
