Property Tax - Calculate Property Tax | Kotak Mahindra Bank - Home Loan Stories

30 JUNE, 2021

Owning a home comes with its own set of responsibilities. Furthermore, if you have availed a home loan for buying your dream house, you should be a responsible borrower and repay the loan amount within the specified tenure. You must also make the most of home loan tax benefits as it can help you save a large amount in the long run. As a homeowner, you should be aware of the property tax.

Continue to read further to learn more about property tax, the calculation process, and the steps to pay property tax online.

What Is Property Tax?

Property tax, also known as house tax, is a tax levied on real estate owners by the local government authorities or the municipal corporation. Property tax must be paid every year, and it is used for maintenance of the civic facilities around the residence such as roads, lighting, sewage system, parks, and other local amenities.

How to Calculate Property Tax?

Property tax depends on the location of the property. The local government generally uses one of the below-mentioned methods to calculate property tax.

  • Capital Value System (CVS):
    As per CVS, the property tax is calculated as a percentage of the property’s market value. The market value of the property may vary depending upon the type and locality of the property.
  • Unit Area Value System (UAS)
    As per UAS, the property tax is calculated based on the per-unit price of the built-up area of the property. This price is fixed on the basis of expected returns of the property as per its location, land price, and usage. The value obtained is then multiplied with the built-up area of the property to compute the property tax.
  • Annual Rental Value System or Rateable Value System (RVS)
    As per RVS, the property tax is calculated based on the approximate annual rent obtained from the property. The rent of the property is determined based on its location, size, and condition. The property’s neighbourhood and necessary facilities such as hospitals, schools, shops, etc. are also taken under consideration while deciding the property’s rent.


How to Pay Property Tax?

You can pay the property tax online by following the below-mentioned steps. You must note that the steps to pay property tax online may vary in certain cities or municipal corporations.

  • Visit the official municipality website and click on the ‘Property Tax’ option.
  • Select the correct form that is appropriate for your property.
  • Select the year of assessment, i.e., the year for which you have to pay your property tax. You can pay the property tax for the current financial year as well as the dues from the previous years.
  • Fill in the necessary details like Property Identification Number/Property Tax Number, name of the owner, property type, relevant locality, etc.
  • Make the payment by selecting your preferred payment gateway, i.e., Internet Banking/Debit Card/Credit Card.

You must note that property tax cannot be levied on a vacant plot. Thus, if you own a vacant plot, you must contact your municipal corporation or a relevant local authority and inform them about the same.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.