The Vizagapatam Chamber of Commerce and Industry (VCCI) has appealed to Chief Minister Y.S. Jagan Mohan Reddy to defer the decision to increase the property tax by one year in view of the difficult times due to the pandemic situation. The VCCI convened a meeting with AP Chambers, FAPCCI, CREDAI, RSW, Film Distributors Association, Builder Association, and other associations related to the issue, here on Wednesday.
The VCCI has received many representations from members, trade bodies, and residential associations, regarding the impact of the G.O. to change the system of levying property tax from annual rental value basis to capital value system from the financial year 2021-2022.
As per the new G.O., the property tax shall be levied on a certain percentage on the capital value of lands or buildings or both but not less than 0.10% and not more than 0.50% of the capital value in case of residential buildings and shall not be less than 0.20% and not more than 2.00% of the capital value in case of non-residential buildings. It shall be effective from the financial year 2021-2022.
As per this G.O., a 1000 sft. flat can be taxed between Rs. 5,000 and Rs.25,000 and a commercial property can be taxed from Rs.12,000 to Rs. 1,20,000. Citizens are worried about the variation in percentage as they feel that they will fall under the higher slab and the increase will be around 10 times.
Due to COVID-19, the rental values all over the State fell by 20%, for residential buildings and 50% for commercial buildings. In fact, many commercial establishments were closed and there was no income on these properties. The building owners are expecting a relief from the State government as it was done by the Telangana government. An increase of taxes from April 2021, would be a huge burden in these difficult times. The State government has announced its action plan and announced that the preparatory work would start from December 10. VCCI President G. Veeramohan and honorary secretary Ravi Godey addressed the association meeting.
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