Vinayak Realtech

Imagine waking up one fine morning and getting a notice from the local government that your property is no longer yours. How will you feel? You will feel helpless, and it can happen if you do not pay property taxes on time. On-time tax filing helps you to stay protected against any legal hassle, and before that, learning about it and its assessment process is crucial. Staying informed helps in managing things better.If you are stressed over how to gather information regarding this, read this blog “What Is Property Tax Assessment” . In today’s comprehensive piece, we will share what a property tax assessment is and why it is crucial.

Let’s start!

What is Property Tax, and What is Property Tax Assessment?

What Is Property Tax Assessment? Property tax is the amount you pay your local government or municipal corporations. The authority uses this resource to take care of the local civic amenities. It includes roads, parks, sewage systems, and lighting. This umbrella term denotes all properties. Whether you own residential spaces or commercial premises, you must pay this tax. The tax also includes commercial premises rented out to third parties.

What Is Property Tax Assessment? Property tax assessment is the way of determining the amount of this tax. The local authority has various criteria to fix this tax, and they are as follows:

• Location of property
• Type of occupancy, like self-occupied or rented out
• Type of the property, such as residential, commercial, or land
• Amenities you have in the property, such as car parking, rainwater harvesting, etc.
• Construction year
• Type of construction: single floor, multi-storied, pukka or kutcha structure
• Floor space index
• Carpet area

An assessee (the person liable to calculate and collect the tax) considers these factors as the base. Then, multiply it by the local tax rate to calculate the final tax bill. If you want to understand it easily, calculate it in this way:

Property tax = base value x type of building x age factor x floor factor x category of use x built-up area.

What Is Property Tax Assessment? What are the Different Methods to Calculate Property Tax?

Calculating property tax by yourself offers peace of mind and utmost transparency.  Therefore, you must calculate it, and there are multiple ways authorities use it. Follow the method your local authority uses. Some of them are as follows:

What Is Property Tax Assessment? Unit Area Value System (UAA)

In the unit area value system, the tax gets calculated based on the property’s per-unit price of its built-up area. The assessee evaluates the value based on the expected returns of the property on usage, location, and land price.

Once done, the value gets multiplied by the built-up area, which gives its ultimate tax valuation. The unit area value system is highly popular in cities like Delhi, Hyderabad, Bengaluru, Patna, and Kolkata.

Annual Rental Value System or Ratable Value System (RVS)

In the annual rental value system, tax is calculated based on the rental value of a property. The valuation of the property varies based on factors like property location, size, and condition. In this method, the assessor also considers factors like property proximity to landmark areas and amenities.

Take note that this method does not focus on the actual rent you are receiving as a property owner. Instead, they focus on its potential. It is particularly popular in Chennai and parts of Hyderabad. West Bengal has been replaced by the Unit Area Assessment (UAA) system. Kolkata has accepted the method (UAA) since April 1, 2017, while

New Town adopted it in the 2018-19 financial year.

Capital Value System (CVS)

The capital value system is based on the market valuation of the property. The local administration, such as a municipal body or government, decides the valuation of an area and property. Then, the authority claims a percentage of it as tax. It gets used in Mumbai.

As the tax is solely based on the valuation of a specific area, it varies significantly. The G-South (N M Joshi Marg, Prabhadevi, Worli) area has the highest tax. It was Rs 1,708 crore as of March 31, 2022. The H-East (parts of Bandra, Khar, Santacruz, Vile Parle) comes in the second position on this. The area witnessed a hefty tax of Rs 1,500 crore in the same year.

What is the Assessment Number in Property Tax?

As a property owner, you must focus on every associated thing with the property tax for a smooth tax filing. The assessment number is one of the crucial parts of it. The property tax assessment number is a unique identification number. The local authority provides this number to every property for taxation.

The assessment number in the property tax acts as the account number of the property. It remains linked to its tax details, such as ownership, location, assessed value, and payment history. You require this number for paying taxes, checking dues, or filing appeals. It ensures all tax records are accurately tracked and connected to the correct property and owner.

How Does the Property Tax Matter in Residents’ Lives?

Property tax is mandatory for every land or any other property owner. It is one of your biggest duties as a responsible citizen of this country. If you fail to pay it on time, you must pay 2% interest as a penalty.

The interest rate varies by state and city as it is solely controlled by local and state governments. Additionally, long-overdue property tax comes with hefty consequences. The local administration can seize and auction your property to recover the dues.

How to Pay the Property Tax?

You can pay the property tax both online and offline. To pay it offline, you must visit the office of the local government. On the other hand, to pay it online, you must follow the steps as follows:

• Log in to the official portal of the municipal corporation of your city/state.
• Click on ‘Property Tax’ and then move to the payments option.
• Fill out the property tax form and choose the assessment year.
• Select the mode of payment from the options provided therein.
• You can choose between debit/credit cards or net banking.

Through the selected method, you can pay into the account of the authority directly. Once the payment is done, you will receive teh online challan against your payment.

Property is crucial to ensure your ownership of the property and maintain the legalities. Understanding the assessment process helps you to know how much you need to pay, and you can plan your expenses.

At Vinayak Realtech, we believe an informed homeowner is an empowered homeowner. We follow this during the sale of our projects as well, and to meet this goal, we inform teh client about every detail regarding the flat. This helps us maintain the highest transparency.

Call us to visit the property now