With multiple projects across city and near-empty coffers, civic body is looking to add desperate money-spinner proposals in next week’s Budget 2025-26
The BMC is empowered to revise property tax every five years. File pic/Shadab Khan
To tackle future financial challenges, the Brihanmumbai Municipal Corporation (BMC) is exploring the possibility of an increase in property tax as well as upgrading its redevelopment policy. The potential tax hike could hamper mid-range property buyers. Meanwhile, officials revealed to mid-day that no new projects will be announced in the BMC budget for the financial year 2025-26, which is to be presented to the civic body’s standing committee in the first week of February.
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A BMC official told mid-day, “Our slate of mega projects is full and we can’t take on any new ones in the next financial year. Costs related to existing projects will rise after two years, posing a challenge to the BMC. To meet these financial challenges, we are looking at increasing property tax, imposing property tax on commercial slums, revising premiums [paid by developers] related to the redevelopment of BMC-owned properties and leasing such properties.”
Anuj Puri and Bhushan Gagrani
As per its guidelines, the civic body is empowered to revise the property tax every five years, officials said. However, in 2020-21, five years after the previous tax revision, the civic body didn’t raise the tax owing to the pandemic following opposition from the standing committee and BMC House. In 2022, the municipal corporation planned to raise the property tax by a 16 per cent rise.
The BMC has approved projects worth around R1 lakh crore in the past two years, including the Coastal Road from Versova to Dahisar (Rs 16,621 crore) sewage treatment plants (Rs 27,000 crore), road concreting projects (Rs 12,000 crore), the Dahisar-Bhayandar connector (Rs 1,998 crore), Goregaon-Mulund Link Road tunnel (Rs 6,322 crore) and Madh-Versova bridge (Rs 1,800 crore). Payments to respective contractors will start after two years.
The Brihanmumbai Municipal Corporation headquarters on January 23. Pic/Satej Shinde
“Apart from paying for these mega projects, there are regular expenses pertaining to public healthcare, water supply and solid waste management, among other things,” said a civic official.
Impact on aam aadmi
A property tax hike could have varying impacts on new homebuyers. According to experts, upper mid-range and luxury buyers are likely to absorb the increase without significant financial strain. “However, buyers in the mid-range housing segment would be affected as prices are already very steep in Mumbai. Even a modest tax hike would escalate their cost of ownership, making home purchases less viable for them. This could dampen demand from buyers who do not benefit from the existing property tax benefits and waivers on affordable housing. To address this, the upcoming budget should provide relief measures for such homebuyers,” said Anuj Puri, chairman of Anarock Group.
OfficialSpeak
Municipal Commissioner Bhushan Gagrani said, “We are looking to strengthen our current revenue sources. We need to meet future demand concerning payments related to projects.”
Meanwhile, the BMC received 2700 suggestions in connection with the civic budget from citizens. BMC appealed to citizens to share their views about the civic budget. Most citizens suggested strengthening BEST.
Meanwhile, the BMC has decided not to enforce a solid waste management tax on citizens. It had been proposed for the next financial year.
Sources of income
A major source of the BMC’s income is grant aid of octroi from the state government, which is estimated at Rs 13,331 crore in one financial year. The BMC collected Rs 5847.68 crore from property tax from the start of the current financial year till December 2024. The target for the current financial year is approximately Rs 6200 crore.
The components of property tax are water benefit tax (21 per cent), sewage benefit tax (13 per cent), BMC education cess (12 per cent), state education cess (10 per cent), tree cess (0.6 per cent) and road tax (15 per cent). The municipal corporation also collects separate water and sewage taxes from citizens. The BMC estimates an income of Rs 3927 crore from the water and sewage tax for the present financial year.
Rs 1,00,000 crore
Value of projects approved by BMC since 2023
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