Thane Property Tax Hike: What Residents and Homebuyers Need to Know

The method of calculating the property transfer fee has also been changed from a size-based calculation to a flat rate of 0.5% based on the property's government-determined value.

The revised charges may add to the cost of owning or transferring a property, depending on the type of property and the transaction.

How Does the Thane Property Tax Hike Affect Residents and Homebuyers?

The impact can vary depending on whether you own, rent or plan to buy a property.

• If you own a property: You may have to pay a higher property tax based on the type of property and the revised rates.
• If you are a tenant: Although the property tax is paid by the owner, you might see a hike in the monthly rent, maintenance fee or another payment made to the landlord to adjust for the higher cost. Any such increase will depend on the rental agreement and the terms agreed with the landlord.
• If you plan to buy a property: The hike may contribute to an increase in property prices in the area. However, property prices can also depend on factors such as market value, property type, location, and demand. The tax hike alone may not determine the property's price. You may also need to budget for the property transfer fee if the agreement places this cost on you. Since the calculation method has changed, the amount payable may also differ from what would have applied under the earlier size-based method.
• If you have bought a property with a home loan: You may need to budget for the additional property tax payment without affecting your regular home loan EMI.

Does the Property Tax Hike Affect All Properties Under Thane Municipal Corporation?

The new property tax hike may not affect all residential properties in the same way. Residential properties up to 500 sq. ft. currently receive a 100% exemption on the general tax component of the property tax. However, other components such as applicable utility and service cesses may still be payable.

The detailed notification and implementation rules from the Thane Municipal Corporation will provide more clarity on which properties will be affected by the revised rates and how the existing exemption will apply.

What is the New Property Transfer Fee in Thane?

The property transfer fee is not a new fee. However, the method used to calculate it has changed. Earlier, the fee was linked to the size of the property, so a larger property could attract a higher transfer fee while a smaller property could attract a lower fee.

Under the revised method, the transfer fee is set at a flat rate of 0.5% of the property's applicable government-approved market value. For example, if the applicable market value of a property is ₹80 lakh, a 0.5% transfer fee would amount to ₹40,000.

The change in calculation method does not necessarily mean that the transfer fee will increase for every property. Depending on the property's size and applicable government-approved market value, the fee may be higher or lower than what would have been payable under the earlier calculation method.

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What Should You Check Before Buying a Property in Thane?

If you are planning to buy a property in Thane, check the following before finalising the purchase:

• Property tax dues: Verify that the seller has paid the property tax due up to the date of purchase. Ask for the latest tax bill and payment receipts.
• Property details: Check that the property number, owner's name, and other details on the TMC property tax records match the property and seller details. TMC allows property tax details and bills to be checked online.
• 500 sq. ft. relief: If you are buying a residential property up to 500 sq. ft., check whether the applicable exemption on the general tax component is reflected in the property tax bill.
• Transfer fee: Check the applicable transfer fee and how TMC calculates it for the property you plan to buy.
• Other property documents: Verify the sale documents, ownership records, and other approvals relevant to the property before completing the purchase.
• Property area: Check whether the 500 sq. ft. limit is based on the carpet area or built-up area of the property.
• Check the new property tax guidelines: Once TMC releases the detailed guidelines for the property tax hike, check them to understand which properties will be covered and how the revised tax will be calculated.

Final Thoughts

The property tax revision is a major change for Thane residents and people planning to buy a home in the city. While the actual impact can vary from one property to another, buyers should keep these changes in mind when planning their property purchase. Checking the applicable charges and latest TMC guidelines can help you make a more informed decision.

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