Flatowners with illegal extensions to shell out steep penalty

The circular stated that no penalty should be charged for illegal extensions/constructions from owners of flats that measure 600 square feet or less. 

DESPITE a state government circular on relaxing penalties levied on property tax payable by homeowners with unauthorised constructions or extensions, the Brihanmumbai Municipal Corporation has decided to continue charging twice the property tax levied on the illegal area. The proposal to continue levying a steep penalty was approved by the civic body’s Standing Committee on Wednesday.

The provision for the penalty (twice the assessed property tax) was made under Section 152 (a) of the Mumbai Municipal Corporation Act, 1888, as amended in April 2010. The amendment allowed property tax to be calculated on the basis of a property’s capital value instead of on its notional rent-earning capacity or rateable value.

The state government, through a circular dated January 11, 2017, had asked all municipalities across the state to relax penalties to prevent common residents from facing action on irregularities committed by builders/developers. The circular stated that no penalty should be charged for illegal extensions/constructions from owners of flats that measure 600 square feet or less. An additional 50 per cent of the property tax payable for the illegal area may be levied on owners of flats measuring 601 to 1,000 square feet, the circular said. Meanwhile, for those owning homes over 1,000 square feet and have illegal constructions in them, the penalty would be double the property tax levied on the illegal area.

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Though provisions for a penalty were made in 2010, it was implemented only in June 2014, said a senior official.

“Suppose a person owns a 1,000 square feet flat for which he is paying property tax. He adds 200 square feet area to his house by constructing illegally. According to the 2010 rule, he has to pay property tax for the 200 square feet, and a penalty that is twice the property tax calculated for the illegal area. Thus, even if he is occupying 1,200 square feet, he will be asked to pay property tax for 1,600 square feet. Similarly, if the flat is entirely illegal, the penalty will be twice the property tax of the entire flat,” said a senior official.

Officials of the Assessment and Collection department of the BMC argue that the state government circular clarifies that it is the responsibility of the municipality to decide the sum to be levied as penalty. “Hence, we decided to go ahead with the double penalty, and the Standing Committee has approved the same,” the official said. The 2010 rule says levy of penalty and collection of property tax cannot be construed as regularisation of the unauthorised construction.