The Hindu : Karnataka / Bangalore News : ‘New CVS is unrealistic and impractical’

Online edition of India's National Newspaper
Tuesday, Mar 18, 2008
ePaper | Mobile/PDA Version

Karnataka

Karnataka - Bangalore

‘New CVS is unrealistic and impractical’

Staff Reporter

Make registered value as base for calculating property tax, say residents

— Photo: K. Murali Kumar

Deep discussion: Residents of Indiranagar and surrounding areas at a meeting to discuss the impact of the proposed CVS in Bangalore on Monday.

Bangalore: “Why can’t we adopt a more realistic and practical method for computing property tax when alternatives are available? Considering the registered value of a property as the base for calculating the property tax is more a realistic and practical approach when compared with the present Capital Value System(CVS)-based collection of property tax that is being introduced in Bangalore city.”

This was the suggestion of a resident of Indiranagar, which received good support from others, who participated in a discussion on CVS organised by the South Indian Women’ss Association (SIWA) on Monday.

N.T. Siddaramannanavar, a retired general manager of NGEF, said that demanding property tax based on the Guidance Value (government fixed minimum market value for properties) was unrealistic.

Even capitalist countries such as the U.S. have adopted a more practical approach for property tax collection though based on the Capital Value system, and that latest registered value of the property is the basis for collection of property tax in California State, he pointed out.

“My son had purchased a property in California for $ 2 million about 10 years ago and he has been paying a property tax of $20,000 every year at the rate of 10 per cent of the registered value of the property. However, the person who had sold the property to my son was paying only $1,000 as property tax as he had purchased it only for $100,000,” Mr. Siddaramannanavar said.

Though the tax rate is on the higher side, the base for calculating property tax was realistic and practical in the United States, he added. Referring to the property tax on his house in HAL II Stage here, Mr. Siddaramannanavar said the Bangalore Development Authoritys had allotted the site measuring 50X75 ft for just Rs. 8,000 in 1979.

“Today the Guidance Value fixed by the government is around Rs. 4,000 for my locality, which would mean that I should pay property tax assuming that value of my property is about Rs 1.5 crore. Is it not unrealistic?” he asked.

Adoption of such an illogical methodology would only abet the people living in city to commit suicide on the lines of farmers, who were committing suicide as they were unable to bear the burden of loans with exorbitant interest rates, said Mr. Siddaramannanavar.

Losing shelter

Mr. Raman, another resident of Indiranagar, asked what should happen to those who have marginal income but have inherited ancestral properties in prominent localities. “Will it mean that those who cannot afford to pay property tax should compulsorily sell the shelter provided by their ancestors?” he asked.

“Why should one pay property tax by assuming the selling price? Property prices might have gone up manifold but per capita income of people has not increased in that range.

That being the position, how can the authorities impose tax based on assumptive rates?” Mr. Raman questioned.

Domlur 2nd Stage Residents’ Welfare Association office-bearers said the residents had no clear picture on the likely increase in property tax as the authorities have not officially come out with CVS structure though they want to implement it from April 1. Some of the residents wanted the present Annual Rental Value based property tax system to be retained.

Printer friendly page
Send this article to Friends by E-Mail

Karnataka