Mumbai: The BMC has collected Rs 3,100 crore in property tax between April and September, marking the first half of the 2025–26 financial year. This amounts to over 40% of its annual target of Rs 7,700 crore. A crackdown on major defaulters has contributed to the recovery of long-pending dues, claims the civic official.
Challenges in Collection
The municipal corporation’s property tax collection has faced challenges in recent years. The decline in collection was largely due to exemptions for residential properties up to 500 sq ft and the lack of a tax revision since 2015-16.
Legal complexities associated with new methods of property tax calculation further hindered revenue collection for the BMC in the 2023-24 financial year. However, since last year, the civic body targeted big defaulters which help to collect a record break revenue Rs. 6,388 crores against Rs 6,200 crores for the financial year 2024-25, the highest since 2010.
Tax Revision and Enforcement Measures
In May, the property tax was restructured to 15.89% for the financial year 2025–26, based on the revised Ready Reckoner (RR) rates, which are used to determine property valuations for stamp duty and taxation purposes.
Authorities also targeted major defaulters with outstanding dues running into crores, recovering a significant portion of the arrears. The civic body is now planning to auction properties of persistent defaulters who failed to clear their dues despite repeated warnings.
Impact on Revenue and Outstanding Dues
"These combined efforts have led to the recovery of 40% of the targeted property tax for the current financial year—an amount that is typically recovered by December," said a senior civic official of Assesment and Collection department.
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Property tax is the second-largest source of revenue for the municipal corporation. However, cumulative outstanding dues—pending since 2010—have now ballooned to Rs 22,000 crore, including penalties accrued over the past 15 years.
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