Mumbai BMC Increases Property Tax by up to 15% After a Decade

Mumbai: After almost a decade, the BMC (Brihanmumbai Municipal Corporation) has increased property tax rates by up to 15% for over 9 lakh properties for the 2025-26 fiscal year. The bills were raised this month, and the increase is based on the ready reckoner (RR) rates, which determine property valuations for stamp duty and taxation.

There is a maximum 15% increase, but it could be less depending on the RR rate of the locality, according to an official. The recent rise in RR rates was factored in while increasing the tax. However, around 3.6 lakh residential properties measuring under 500 sq ft (carpet area) remain exempted from property tax, as per a 2017 state directive.

With the BMC increasing property tax rates by up to 15%, a residential unit with a tax of Rs 10,000 will now have to pay Rs 11,500. However, residents argue that the hike is significantly higher in certain areas than the 15% figure claimed by the BMC. For instance, a flat owner in Andheri West, who was billed Rs 29,211 last year, has received a bill of Rs 36,898 for 2025-26, an increase of nearly 26%.

Similarly, a Bandra West resident said his property tax bill has jumped from around Rs 1.10 lakh last year to Rs 1.36 lakh this year, marking a 23% rise.

The last hike in property taxes occurred in 2015-16. BMC was supposed to revise rates in 2020, as per the norm of a review every five years. However, due to the pandemic, the decision was stalled. Subsequent political developments in the state put the move on the backburner. In 2024, the corporation stated that 2025 would mark the completion of a full five-year cycle, making it a more appropriate time to revise rates.

With the government increasing ready reckoner rates in March 2025 by an average of 3.39%, thus impacting property valuations, the hike in taxes was seen as inevitable. However, the BMC has not revised its property tax collection target of Rs 5,200 crore for 2025-26, despite the hike in rates. The impact of the increase is yet to be assessed, officials said.

Former Bandra West corporator Asif Zakaria said the hike was 'alarming,' especially coming at a time when the BMC has been functioning without elected representatives for the past three years. Zakaria said implementation of a new system based on the capital value of the property has still not been resolved for assessing property tax.

'This is an issue that continues to burden Mumbaikars unjustly despite multiple clear directives from the courts. No corrective action has been taken to amend new rules 20, 21, 22 as directed by the Supreme Court and High Court. This correction itself is expected to reduce property tax bills by 40% for 2010 onwards till 2024–25,' he said.

Mumbai North Central MP Varsha Gaikwad accused the BJP-led state government of inflicting another financial blow on Mumbaikars – 'a brutal 13-20% hike in property tax, in clear violation of Supreme Court directives.' 'Without revising the Capital Value rules – as ordered by the SC – and without reassessing taxpayers, the state-controlled BMC has started processing new property tax bills,' she added.