FAPCCI Seeks Reversal Of Property Tax Hike
The federation pointed out that amendments to the Municipal Corporation Act changed property tax assessment from rental value to capital value, creating substantial long-term financial strain on property owners.
Visakhapatnam: The Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) submitted a letter to TD state president and Gajuwaka MLA Palla Srinivas Rao, expressing serious concerns about property tax hike amid the current economic recession and decline in real estate market.
In the formal representation, Federation chairman Srinath Chittori and members requested urgent intervention to alleviate the financial burden caused by the rising property taxes, appealing for the immediate reversal of the recent hikes.
The federation pointed out that amendments to the Municipal Corporation Act changed property tax assessment from rental value to capital value, creating substantial long-term financial strain on property owners. Under the revised system, property taxes are now linked to rise in market values, resulting in tax obligations nearly doubling for property owners, they noted.
They further mentioned that the capital value-based system has imposed extra burdens, such as taxes on vacant plots when sold and supplementary taxes on buildings lacking property permits. The chamber specifically requested for the repeal of Amendment Act 44/2020 and GO No. 198. They urged for orders to halt the 15 per cent property tax increase scheduled to begin in April and cancel the 24 per cent penalty on delayed payments.
The federation also pleaded for the allowance of penalty-free payments until the end of June and requested that future penalty interest be capped at 12 per cent, in alignment with standard financial practices.
The association emphasised the severe market recession, noting that even the VMRDA (Visakhapatnam Metropolitan Regional Development Authority) failed to sell more than 15-20% of plots at minimum sub-registrar values during recent auctions. The real estate sector has faced a significant downturn, with builders unable to move existing inventory.
According to the federation, increasing property taxes during this economic climate places excessive pressure on property owners, who are already dealing with declines in business due to global trade disruptions and rising unemployment rates.