Business
How to calculate Property tax in Gurugram?
It is essential to understand what property tax is, why it is collected, the authority responsible for managing it, and the method of collection. Having the abovesaid knowledge and the approach to calculate the rate of property tax will give a wholesome idea about the topic of concern.
What is property tax?
Property tax, also known as house tax or municipal tax, is a tax imposed on the property or immovable assets like a house, rental house, office, land, etc., by the local municipality. It is to be paid by the property owner on an annual basis. The local municipal corporation is the authority to assess, levy, and collect the tax.
Why is MCG Gurgaon property tax collected?
The revenue collected through the property tax is used to maintain civic amenities like footpaths, roads, sewer systems, parks, and streetlights. It is utilized to provide law enforcement and other benefits to the citizens.
How are the property tax rates in MCG calculated?
Various factors like the locality, property size, and type, age of the property, its utility, the area covered, and the owner’s profile (i.e., age, gender, occupation, or income) decide the property tax rate. Thus, it varies from state to state and from one municipal corporation to the other.
Usually, the property tax rate of residential property is lower than that of commercial property. To be specific, the property tax rate is calculated as a percentage of the annual rental value, capital value, or unit area value of the property. E.g., property tax in Gurugram (MCG) is calculated based on the size and use of the property.
To make the process of property tax assessment and payment seamless, the municipal corporation of Gurugram introduced a new system in 2013 where citizens can calculate their tax liability depending upon the rate of their specific house type.
However, mentioned below is the detailed break-up of the property tax rates.
Property Tax rate on Residential Property (House)
| Area (Residential House) | Property tax in Gurgaon (Per square yard per year) |
| Up to 300 square yards | Re. 1 |
| 301 to 500 square yards | Rs. 4 |
| 501 to 1000 square yards | Rs. 6 |
| 1001 square yards to 2 acres | Rs. 7 |
| More than 2 acres | Rs. 10 |
Note:
The rates mentioned above are applicable only to houses located on the ground floor. If the floors of the building have separate owners, then the same rate is applicable to each floor. If all the floors are owned by the same owner, then a floorwise rebate will be applicable on each floor (40% rebate on the first floor and 50% rebate on the second floor).
FLATS
| Area (Flats) | Gurugram property tax per square foot per year |
| Up to 2000 square feet of carpet area in a flat | Re. 1 |
| Carpet area: 2001 – 5000 square feet | Rs. 1.20 |
| Carpet area above 5000 square feet | Rs. 1.50 |
VACANT LAND (Residential)
| Area (Vacant land) | Property tax (Per square yard per year) |
| Up to 100 square yards | Nil |
| 101-500 square yards | Rs. 0.5 |
| More than 500 square yards | Re. 1 |
Property Tax in MCG on Commercial Properties
SHOPS
| Area (Shop-Ground Floor) | Property Tax (Per Square Yard per year) |
| Up to 50 square yards | Rs. 24 |
| From 51 to 100 square yards | Rs. 36 |
| From 101 to 500 square yards | Rs. 48 |
Note:
- The rates mentioned above are applicable only to the shops located on the ground floor. In multistoried buildings owned by the same person, a property tax rebate of 40% is applied on the first floor and 50% on the second floor (it is calculated in reference to the tax rate of the ground floor).
- If the shop or a part of the shop is rented or leased out, then the Gurugram property tax
- applicable will be 1.25 times the above rates for the rented out area.
COMMERCIAL AND INSTITUTIONAL SPACES
| Area (Commercial Spaces) | Property Tax Per Square Feet Per Year |
| Up to 1000 square feet | RS. 12 |
| More than 1000 square feet | RS. 15 |
| Area (Industrial) | Property Tax Per Square Yard Per Year |
| Up to 2500 square yards | Rs. 5 |
| From 2501 square yards to 2 acres | Rs. 6 |
| From 2 acres to 50 acres | Rs. 6 till 2 acres + Rs. 2 per square yard for the area more than that |
| More than 50 acres | Rs. 6 till 2 acres + Rs. 2 per square yard for the area more than 2 acres but less than 50 acres + Re. 1 per square yard for the area more than 50 acres |
| Area (Institutional-Commercial) | Property Tax Per Square Per Yard Per Year |
| Up to 2500 square yards | Rs. 12 |
| From 2501 to 5000 square yards | Rs. 18 |
| More than 5000 square yards | Rs. 24 |
REBATES
Complete rebate is provided on property tax by the municipal corporation of Gurugram in the following types of property:-
| Sr. No. | Rebate Provided on the following properties |
| 1. | Property where religious activities are executed |
| 2. | Properties belonging to the municipality |
| 3. | Dharamshalas |
| 4. | Central and State governments’ educational institutions |
| 5. | Government Hospitals |
| 6. | Property of Defence Paramilitary forces personnel |
| 7. | Property of ex-service personnel and family |
| 8. | Property occupied by the families of deceased soldiers/ex-serviceman |
| 9. | Property of war widows |
| 10. | Horticultural/Agricultural property up to 1 acre |
| 11. | Buildings belonging to the State Government |
| 12. | Flats up to 2000 sq. ft. |
Note:
A 10% rebate is applied to the owners who clear the property tax payments before the 31st of July of the assessment year.
Delayed payment or default of property taxes may have grave consequences. The defaulter will have to pay a penalty of 1.5% of per month’s outstanding liability. This penalty is also applicable in the case of under-reporting of property tax liability. Although the fundamental rule is that the penalty shall not exceed the initial amount, in extreme cases of default, the properties may be sealed by the authorities.
The authorities keep devising methods to simplify the tax assessment, collection, and grievance redressal. The purpose is to maintain transparency in governance. It is the duty of every citizen to pay taxes on time and regularly to avoid strict legal action and penalties, thereby availing the benefits of civic facilities Read more
