Property Tax Mumbai: Its Calculation, Payment, Rebate [Full Guide]

The erstwhile Brihanmumbai Municipal Corporation, now known as the Municipal Corporation of Greater Mumbai (MCGM), is the governing civic body of Mumbai City and is India’s most profitable municipal corporation.

All residents of Mumbai who own any of the following real estate, such as residential, commercial, buildings, land, etc., are subject to tax. It is mandatory for property owners in Mumbai to pay the MCGM property tax every year.

It is enforceable under the Municipal Corporation Act of 1888 and revises once every five years. But the hike was deferred due to the Covid 19-pandemic, and the rate was last revised in 2015.

This article strives to share information and guide you on the process of how to pay the MCGM Property Tax in Mumbai online, along with the applicable rates.

The property registration process in Mumbai falls under the Department of Registration and Stamps, Maharashtra. The office of the Inspector General of Registration and Controller of Stamps (IGR) extends the following services:

facilitating payment of stamp duty,
evaluating property value,
property tax computation,
registration fee payment, and
refund of stamp duty, among others.

In Navi Mumbai, the responsibility of collecting taxes lies with the Navi Mumbai Municipal Corporation.

Also, read about Nagpur Property Tax and PCMC Property Tax!

MCGM Mumbai Property Tax In a Nutshell

The process by which the MCGM calculates the tax varies slightly when compared to other municipal corporations. The MCGM calculates the property tax due based on the property’s market value.

Suppose the property owner delays paying the Mumbai MCGM property tax as mandated. In that case, they are liable to pay a fine of 2% for every month’s delay in the payment, which applies to the total property tax due.

While calculating the total property tax due, various forms of cess must be considered. These include cesses for Street Tax, Water Tax, Municipal Education, Sewage Tax, and Tree Cess.

Calculating MCGM Property Tax in Mumbai

1. Old System vs New System

Previously the MCGM calculated the property tax based on the rate-value system, under which the tax rate was based on the rent payable on a particular property accrued over the year. As the methodology used generated low revenue due to the Rent Control Board’s artificially low rental rates.

Currently, the MCGM is following the capital value system as a replacement, where the tax calculation uses the stamp duty ready reckoner rate as a reference point. They source the rate from the government, which evaluates the property value on varied parameters. The tax rate faces annual revision to maintain it at a realistic value.

The payee can check the ready reckoner rates on the Registration and Stamps Department website at www.igrmaharashtra.gov.in/eASR.

2. Property Tax Calculation Process

The MCGM property tax in Mumbai is evaluated on several parameters, including property location, property type – whether commercial, residential or vacant land, amenities provided, building age, whether multi-storied or single floor, occupation status, carped and the Floor Space Index (FSI).

Taking all these factors into account, the civic body utilises a formula for arriving at the tax liability of Mumbai residents.

Below is the formula for calculating the Mumbai MCGM property tax:

Property tax is Tax rate x Capital value

Note:

Property tax is a pre-determined percentage of the capital value.

Capital value depends on the base value.

Therefore,

Capital Value = Base value rate / Property’s market value (based on the Ready Reckoner) x Built-up area x Age factor x Type of building x Category of use x Floor factor.

The MCGM assigns different weights for factors such as construction type, building age, and user category. These weights are vital for calculating the tax due, and the information provided below sheds some light on the weights of the respective parameters.

Weights for construction type in units:

Bungalows and RCC construction – 1 Unit.
Structures apart from RCC – 0.60 units.
Vacant or under construction land – 0.50 units.
Weights for property age in units:
Properties that were constructed before 1945 – 0.80 units.
Properties that were built between 1945 and 1985 – 0.90 units.
Properties that were constructed post-1985 – 1 unit.
Weights for user category in units:
Hotels and hospitality sector establishments – 4 units.
Commercial properties – offices and showrooms – 3 units.
Factories & industries – 2 units.
Homes and charitable institutions – 1 unit.

You may find below an example of how the MCGM calculates property tax on a residential property in Mumbai:

Ready Reckoner Rate (Base Value) = Rs 40,000/ Sq mt

User Category = Residential Property (0.5)

Nature of Building = 1 For RCC building

Age Factor = 1 (Assuming the age factor on a 9-10-year-old building)

Floor Factor = 1.0 (1-4 Floors)

Carpet Area = 200 Sq mt

The property tax rate for residential Properties in Mumbai is 0.755%

Thus the capital value will be derived by:

Capital Value (CV) Formula = BV x UC x NTB x AF x FF x CA

= 40,000 X 1 X 1 x 1 X 1 X 200

= Rs 80,00,000

Total Property Tax = 0.755% of 23,75,000

= Rs 60,400/-

The example provided will help clarify how the property tax due is arrived at.

Taxpayers may decide to opt for either online or offline methods for this annual payment. But, first, we will delve into how the payment process works on the MCGM property tax online portal.

Procedure For Paying Mumbai MCGM Property Tax Online:

MCGM Online Property Tax Payment — Source: Karolina Grabowska / Pexels

The following steps guarantee payment of the MCGM property tax in Mumbai online if followed according to the steps outlined below:

Steps for paying MCGM property tax through the MCGM portal.

Head to the online portal of the MCGM.
Select ‘Property Tax’ that can be found under the ‘For Citizens’ option.
Head over to the new page that opens up and type in your Property Account Number, followed by the appropriate captcha. If you are not aware of the Property Account Number, click on the search option and provide the ward number and property address to get the Property Account Number.
Next, three options will be visible to you. You can choose to view outstanding bills and previous receipts or make a payment.
After sharing the make payment option, taxpayers will once again be redirected to a new page. The newly opened page will display the year-wise distribution of the pending dues.
After verifying the details, enter the required amount you must pay.
Proceed to click on the online payment button.

The payee may proceed to pay the MCGM property tax by using the appropriate payment gateway and save the generated acknowledgement.

Please note that the payment options available are National Electronic Funds Transfer NEFT / Real Time Gross Settlement (RTGS), net banking, or credit/debit cards.

Procedure for Paying Mumbai MCGM Property Tax Offline:

MCGM Offline Property Tax Payment — Source: Kampus Production / Pexels

Suppose you are a taxpayer wishing to remit the property tax via the offline method. In that case, taxpayers must head to the MCGM help centres located at the office of the Revenue officers or any of the Citizen Facilitation Centres. These centres can be found operating in all wards across Mumbai.

Upon completing the MCGM property tax payment, the payee will be issued a property tax receipt. This receipt can also serve as proof of ownership should any unforeseen circumstances like a land dispute arise. The receipt issues thus can also help the owner avail loans against property or for updating the property details in the civic body’s books.

Last Date of MCGM Property Tax Payment in Mumbai

As with every tax payment, the window for paying it without penalty is open only for a specified time, as stated. The property tax due should be paid before or on the 30th of June, and the previous deadline was the 31st of March.

Obtaining Duplicate Mumbai MCGM Property Tax Receipt

If any taxpayer is looking to download any old receipts for their records or due to the loss or damage of the previously issued receipts, they can follow the below-stated process:

Visit the MCGM online portal.
Select the property tax option under the For Citizen Option
Enter the property account number and process to log in.
All previous receipts regarding property tax payments can be found here.
Taxpayers who have paid the MCGM property tax offline can procure the challan from their respective payment centres.

Receiving MCGM Property Tax Bills Via Email

The Municipal Corporation of Greater Mumbai (MCGM) has made it possible to receive the acknowledgements for the property tax paid via email. Payees must fill out the Know Your Customer (KYC) form online on the MCGM online portal.

First, enter the relevant property account number.
Type in the correct ‘Captcha’ and click the ‘login’ button.
Upload any required documents along with the attested copies of the same.
Provide the correct email ID and contact details for promptly receiving property tax alerts via email and SMS.
Once the process is duly completed and approved, taxpayers will begin to get all transaction confirmations by email.

Rebate on MCGM Property Tax

The civic body offers taxpayers rebates on payment of MCGM property tax in Mumbai if the following conditions are met.

From 1st January 2019 onwards, as per state legislation, residential units measuring up to 500 sq. ft are exempt from paying any property tax.
Residential units with a carpet area between 501 sq. ft to 700 sq. ft can avail of a 60% reduction in property tax rates.
Properties used as places of worship or for charitable purposes are exempt from the property tax levy.
Exemption on MCGM property tax in Mumbai extends to include properties solely dedicated towards use by Diplomatic or Consular Missions of a foreign state as appointed by the Government.

Early Bird Scheme for Taxpayers:

A new scheme initiated by the Municipal Corporation of Greater Mumbai (MCGM) helps early birds obtain the 2% tax concession offered by the civic body. The benefit is provided for payees who pay the dues by June 30th. Further, they provide a 4% concession in property tax for those who fulfil their obligations of paying the second instalment also by the 30th of June.

Please note that the above rebates will be available only for taxpayers with no outstanding dues against their property.

Conclusion

The property taxes collected by the Municipal Corporation of Greater Mumbai help serve all the residents of the bustling metropolis. It goes towards the maintenance and construction of roads, schools, hospitals etc. The funds are even used to care for the many civic amenities such as street lights and parks, which only benefit the public at large.

Even though the property tax collected by the Municipal Corporation of Greater Mumbai is a recurring liability, paying them honestly and sincerely results in a better Mumbai for all.