Garbage tax deferred amid property tax hike
MUMBAI: The civic administration has deferred its much-debated fee on solid waste management, or garbage tax, in view of the increase in property tax. The user fee was meant to cover the daily collection of solid waste from individual homes as well as commercial and industrial establishments. Proposed in April, the fee ranges from ₹100 to ₹7,500, depending on the size and nature of the establishment. It was to be levied under the revised Cleanliness and Sanitation Bye-Laws 2025.
However, on Wednesday, the Brihanmumbai Municipal Corporation (BMC) announced an increase in property tax of nearly 16%. In view of this additional financial burden on citizens, chief minister Devendra Fadnavis and deputy chief minister and urban development minister Eknath Shinde stepped in to defer the proposed user fee on solid waste collection. It was to be added to the property tax bills.
Meanwhile, the BMC has begun issuing revised property tax bills for financial year 2025-26, reflecting an average increase of 15.89%. The civic body clarified that the increase is not the result of any change in tax structure or rates by the BMC, but a statutory revision based on updated ready reckoner rates, which determine the capital value of properties.
Under Section 154 (1C) of the Mumbai Municipal Corporation Act, 1888, the capital value of properties must be revised every five years. Although this mandate was implemented in 2015, the scheduled 2020 revision was postponed due to the Covid-19 pandemic. Legal amendments delayed the process, resulting in the current revision taking place after a ten-year interval.
Each revised tax bill now includes a special notice stating, 'Capital valuation of the property is provisional, indicating that the final tax amount is subject to pending court rulings,' said a senior civic official. Any changes will be adjusted in future bills, either as a refund or additional charge.
To protect low-income property owners, the BMC has reiterated that properties measuring less than 500sq ft will continue to be exempt from property tax. These properties have not been issued revised bills, nor will they be subject to the SWM fee, if and when it is imposed.
The property tax increase has been criticised, mostly from former corporators and other political leaders, who said the increase was unfair to citizens.
In a letter to municipal commissioner Bhushan Gagrani, former leader of the opposition Ravi Raja condemned the administration's inability to recover dues from large defaulters while burdening regular taxpayers. He said property tax has become the BMC's primary source of income after the abolition of octroi, formerly a major revenue stream. According to Raja, while the administration has shown some efficiency in tax collection, it still fails to recoup massive outstanding dues from major property owners.
At present, 481 major defaulters collectively owe the BMC a staggering ₹14,320 crore in unpaid property tax. Prominent among them are Raghuvanshi Mills, Taj Lands End Ltd, Seven Hills Healthcare, MMRDA, Bombay Cricket Association and J Kumar Infra, according to the BMC.
Gaothans hit with 40% property tax hike
A 40% hike in property tax for gaothan properties, traditional or village settlements within the city, has triggered strong opposition. Civic activist advocate Godfrey Pimenta called it 'illegal', demanding its immediate withdrawal.
In a letter to civic chief Bhushan Gagrani, Pimenta noted that his latest six-month bill amounted to ₹19,885, a 40% increase over the earlier rate. He argued that this violates the provisions of the Mumbai Municipal Corporation Act, 1888, which caps such increases at 14.52%, as approved by the civic Standing Committee in 2015.
Pimenta also cited state ordinances protecting small residential units (under 500sq ft) from tax increases beyond the 2015 level, and asserted that even as administrator, the municipal commissioner cannot exceed the limits set by law.
He has demanded a rollback of the hike and adherence to the 14.52% cap, warning against what he called an 'overreach of the civic body'.
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