Finance Commission holds meeting with MoHUA on Property Taxation by ULBs

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The Fifteenth Finance Commission today held a meeting with Union Minister Shri Hardeep Singh Puri and senior officials of the Ministry of Housing & Urban Affairs (MoHUA) on issues including property taxation by Urban Local Bodies (ULBs).  This was in context with the Commission’s recommendations for 2020-21 which had mandated the States to notify floor rates of property tax and thereafter show consistent improvement in property tax collection in tandem with the growth rate of State’s own GSDP.

In view of the fiscal importance of this matter and especially in the current context of Covid-19 pandemic, the Commission had intense deliberations on this matter to help the States and ULBs in having an efficient property tax administration, and to address the rampant undervaluation, scarce information, incomplete property registers, policy inadequacy and ineffective administration, and rectify by appropriate fiscal cadastral with objective tax assessment systems that are progressive, buoyant and equitable to all.

The discussions in the meeting centered around creating an ‘enabling environment’ for ULBs to be placed in the driver’s seat with regard to property tax administration – to remove the duplication, overlapping or fragmentation of functions across different years of the Govt.  The focus was on making the ULBs responsible for collection of relevant data, valuation or assessment, setting tax rates, collecting tax and requisite oversight on all these aspects.

The Secretary, MoHUA, Shri Durga Shanker Mishra made a detailed presentation to the XVFC and submitted MoHUA’s revised memorandum to the Commission for the purpose of the XVFC Report 2020-2021 to 2025-2026.  The Ministry made a series of recommendations which include some non-financial as well as financial recommendations.