Top Indian Cities with Highest Property Tax Collection in FY 2024-25

Property taxes are a vital source of income for municipal corporations in Indian cities. These taxes fund public services and infrastructure improvements, making them crucial for urban development. However, the rates and collections vary significantly from city to city, affecting homeowners and investors differently. This article identifies the top Indian cities with the highest property tax collections for FY 2024-25 and explains the factors contributing to these high rates.

1. Mumbai

Mumbai, known as the financial capital of India, has some of the highest property tax rates. The property tax rates in Mumbai range between 0.316% and 2.296% of the government tax assessed capital value. For most residential property holders, the rates vary from 0.2% to 1.5%. However, properties with luxury features and those in premium wards can reach much higher rates. The Brihanmumbai Municipal Corporation (BMC) recorded an unprecedented ₹6,198 crore in property tax collections for FY 2024-25. This significant amount is attributed to the high property values in Mumbai and the robust collection and enforcement efforts of the BMC.

2. Bengaluru

Bengaluru, the tech hub of India, imposes property tax rates that fall between 0.5% and 1% of the annual value of the property. The tax is calculated using the Unit Area Value method. The Bruhat Bengaluru Mahanagara Palike (BBMP) collected close to ₹4,930 crore in taxes for FY 2024-25. This success is due to strong enforcement, digitization, and the auctioning of properties of defaulters for the first time, which has significantly improved tax collection.

3. Hyderabad

Hyderabad operates a slab-based property tax system, where the tax generally varies from ₹0.5 to ₹3 per square foot on a monthly basis for residential properties. The Greater Hyderabad Municipal Corporation (GHMC) officially collected ₹2,038.42 crore in property tax for FY 2024-25. The city's growing economy and increasing property values have contributed to this high collection.

4. Delhi

In Delhi, property tax rates range from 0.5% to 3% of the property’s annual value, depending on the property's location, zone, and other characteristics. The Municipal Corporation of Delhi (MCD) collected approximately ₹2,024 crore for FY 2024-25. Premium zones with high property values experience the most substantial tax outflows. Despite the high collection, the MCD fell short of its ambitious target.

These cities' high property tax collections reflect their economic importance and the efficiency of their municipal corporations in tax collection. Understanding these rates and collection methods can help homeowners and investors make informed decisions about property ownership and investment in these cities.