Jammu and Kashmir property tax explained: All misconceptions clarified [read now]

In a landmark move, the J&K administration on Tuesday issued a notification, approving the imposition of property tax in all the Urban Local Bodies (ULBs) of the Union Territory, which comes into effect from April 1, 2023. As per the notification, the administration has proposed Property Tax on all properties – residential or non-residential at rates of 5% and 6% respectively annually of Taxable Annual Value (TAV).

"In exercise of the powers conferred by Section 71A of the Jammu and Kashmir Municipal Act, 2000 (hereinafter referred to as the Act), read with Sub-Section 1 of Section 65 and Sub-Section 1 of Section 73 thereof, the government hereby notifies the following rules for levy, assessment and collection of property tax in the Municipalities and Municipal Councils of the Union Territory of Jammu and Kashmir," read the notification issued by Housing and Urban Development department.

"These rules shall be called Jammu and Kashmir Property Tax (Other Municipalities) Rules, 2023. These shall come into force from April 1, 2023," it added.

The government notification regarding property tax in J&K was met with resistance and strong criticism. There's an influx of misinformation in circulation, which has caused panic among people. In this article, you'll find answers to all the questions concerning J&K property tax.

What is Property Tax?

A robust and effective system of local self-government is foundational to the effective functioning of a democracy. A fundamental enabling condition for such a system to exist is to have adequate finances at the disposal of the institutions of self-government, and the more such finances are mobilized at the local level by these governments, the better for their effective functioning. One of the essential pillars of municipal financing the world over is property taxes.

The government of India and the Finance Commissions set up by it have been strongly recommending tapping this resource from time to time. It is with this background, and with an intention to strengthen ULBs and ramp up urban development for the betterment of the common masses, the government has decided to impose property tax in the Union Territory of Jammu and Kashmir.

Without adequate resources, any development is impossible in UT.

Why impose property tax in J&K?

Property tax is being levied across the world by Municipalities to augment their resources. J&K was the only State/UT in the country which did not impose taxes on properties. With poor finances, the Urban Local Bodies across the UT were unable to deliver to their fullest, hindering development and progress. The revenue from other sources accounted for less than 15% of their operational expenses.

Will the government take away the collected funds?

No. The funds will be collected by the ULBs, retained by them and then used for their development needs. The tax will be collected from the people and spent only for their betterment, improving their quality of life.