In a significant policy move, the Government of Maharashtra has amended the Mumbai Municipal Corporation Act to reinstate the Brihanmumbai Municipal Corporation’s power to levy and collect property tax, addressing long-standing legal and revenue issues.
The amendment enables the Brihanmumbai Municipal Corporation to recover property tax dues retrospectively, especially those held up due to disputes over the capital value-based taxation system.
The issue dates back to the transition from the rental value system to the capital value system around 2010. Legal challenges to this shift resulted in partial payments and accumulation of arrears over several years. The revised law aims to resolve these uncertainties by providing a clearer framework for tax calculation and recovery.
Under the updated provisions, the Municipal Commissioner will have expanded authority in determining how property tax is assessed and implemented. This is expected to streamline processes and reduce delays caused by prolonged litigation.
The amendment also allows recovery of pending dues that were earlier kept on hold. For years, property owners paid only 50% of the revised tax, with the remaining amount recorded as arrears. The new framework enables phased recovery of these dues.
The move is not expected to immediately increase property tax for most residents. Instead, it focuses on improving clarity and strengthening the civic body’s revenue base, which supports essential services such as infrastructure, healthcare and water supply.
The decision follows court rulings in 2019 and 2022 that restricted retrospective tax implementation, impacting collections. By restoring these powers, the government aims to enhance financial stability and governance efficiency in Mumbai.
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