Mumbai Property Tax Hiked by 16% as BMC Revises Capital Values After 9 Years

The Brihanmumbai Municipal Corporation (BMC) has revised the property tax payable across Mumbai, resulting in an average increase of around 16% for property owners. While the civic body clarified that no changes have been made to the actual tax rates or structure, the revision was triggered by an automatic recalibration tied to the updated ready reckoner rates for FY26.

Capital Value-Based System Drives the Change

In its official communication, the BMC explained that the hike is a direct consequence of the increase in capital values as prescribed by ready reckoner rates. Since property tax in Mumbai is based on the capital value of properties, any change in the base value leads to a corresponding shift in the final tax amount payable.

For instance, a homeowner who previously paid ₹50,000 in annual property tax may now find the revised bill exceeding ₹57,500, reflecting the recalculated capital value.

First Property Tax Revision in Nearly a Decade

This is the first time since 2015 that the BMC has revised the property tax burden. Although a revision was scheduled for 2020 under Section 154 (1C) of the Mumbai Municipal Corporation Act, 1888—which mandates a revision every five years—it was postponed due to the COVID-19 crisis. The latest hike aligns with the legal requirement for periodic recalibration of capital values.

Flats Below 500 Sq Ft Remain Exempt

Importantly, the BMC confirmed that the exemption from property tax for residential flats under 500 sq ft, introduced in 2022, remains unchanged. This decision is expected to continue benefitting nearly 4 lakh housing societies in Mumbai. As per earlier estimates, the waiver has allowed residents to collectively save ₹460 crore annually.

Garbage Collection Fee Deferred Amid Backlash

The civic body also announced that it has deferred the proposed solid waste management user fee—commonly referred to as the garbage tax—which was initially scheduled for implementation in April. This decision follows public concern over the added financial burden amid the recent property tax hike.

The garbage fee was intended to fund daily waste collection services across residential, commercial, and industrial units, with proposed charges ranging from ₹100 to ₹7,500 depending on the nature and size of the property. However, Maharashtra Chief Minister Devendra Fadnavis and Deputy Chief Minister Eknath Shinde have put the implementation on hold for now, citing concerns over overlapping cost burdens.

Disclaimer: This article is for informational purposes only. Readers are advised to verify developments from official sources or consult legal/property professionals before making any financial decisions.