CURE Bill changes formula, proposes steep hike in property tax
The Core Urban Region (Integrated Governance) Bill, 2026, proposed by the Telangana government, is designed to serve a double whammy to home owners in the
The Core Urban Region (Integrated Governance) Bill, 2026, proposed by the Telangana government, is designed to serve a double whammy to home owners in the city, already grappling with market uncertainties precipitated by war in the Middle East, AI-induced job losses and the general downward trend in economy. Instead of the existing formula for property tax calculation on the Gross Annual Rental Value providing for age-related depreciation on the building, the CURE Bill proposes to slap the tax as a percentage calculated on the capital value of the property, which is the market value enforced through the Registration & Stamps department. The resultant burden will be huge when coupled with the frequent revisions in this value driven not by the market conditions, but by the desperation of the cash-strapped governments.
During the past five years, the market values of properties have been revised thrice by the department, leading to enhancement of about 400 to 800%. All these revisions were driven solely by the compulsion to boost revenue for the debt-ridden governments going overboard with cash doles, rather than any other realistic hike in property prices. The CURE Bill proposes a minimum of 0.1% and a maximum of 0.5% tax on the capital value of a residential property, and a minimum of 0.2% and a maximum of 2% on the capital value of a commercial property. Till the time the corporations fix the revised property tax, the rate will be deemed to be 0.15% of the capital value for residential buildings and 0.75% for commercial buildings, the Bill says.
The lowest property tax thus levied on a 1,200 sft double bedroom house would be close to ₹5,000 as per this method. Greater Hyderabad Municipal Corporation has not revised its property tax rates for over two decades. However, about five years ago, the formula for calculation of Annual Rental Value was tweaked, and depreciation on the older properties was done away with, which increased the tax liability phenomenally on the property owners. Post the enactment of CURE Bill, the burden will go further up for all the owners, though not uniformly. The tax levied on the Western part of the city is set to go up by several notches, owing to the high property values there. For instance, calculated at 0.15%, the tax liability for a 1,500 sft flat in Serilingampally area would go up from around ₹7,000 to nearly ₹15,000 pa.
The only relief provided is gradual increase of not more than 20% per year till it reaches the enhanced value. Public policy experts are also questioning the locality wise variation in tax burden, while the expenditure of the funds is not locality based. “They are not spending the amount collected from a locality on development of the same locality. This will lead to many legal disputes,” activist and writer Donthi Narasimha Reddy says, while pointing out that the city flat rates also include common areas, which needlessly increase the burden.
The BriefWire