Property tax reforms in India: concept, design and challenges
- 2017
- p.1-36.
- Jul-Sep
The tax on non-agricultural land and building (real estate) is a premier local tax the world over for financing local public goods provided by the local governments. It is largely levied on the "the gross annual rent at which the land or buildings might, at the time of assessment, be reasonably expected to be let from year to year" that is expected or actual income (rentals) or some estimates of returns from the real estate on annual basis. This makes it subjective in implementation and loaded with several issues and challenges making it quite unpopular among all the taxes. Since long, various attempts have been made to reform it. Recent attempt is switching over to the second best administratively convenient area-based assessment of properties and it is gaining currency in many countries around the world. The best feature of it is its being hassle-free, transparent mass appraisal, easy to calculate publicly available objective parameters, and citizen-friendly self-assessment. Property identification is technology-driven by using Geographic Information System (GIS) method of mapping. The public participation in policy making is another distinctive feature of the system. In India, this system has been implemented with some variations in various cities. Others are also in queue to do so. Various reports of the Government of India have emphasized the need for switching over to this system, particularly through Jawaharlal Nehru National Urban Renewal Mission (JnNURM) which has provided detailed implementable features and guidance for designing of the scheme. Still there are several challenges in its implementation and enforcement primarily due to poor capacity of the stakeholders and political will. - Reproduced.1
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