JAMMU: The Jammu and Kashmir government on Tuesday approved the imposition of property tax in the urban local bodies (ULBs) of the union territory.
The property tax on residential property would be 5% of the Taxable Annual Value (TAV) while the same on Non-Residential Property would be charged at 6% of TAV.
What is the Taxable Annual Value?
The Taxable Annual Value is the amount on which the property tax will be calculated. The Taxable Annual Value is calculated by multiplying as many as nine factors. These nine factors are MTF, LVF, ARF, FF, UTF, CTF, AGF, SF, and OSF.
These 9 factors when multiplied would give you the TAV, upon which the property tax will be calculated. While these factors might seem intimidating at first, they are. With a pen, paper and a calculator, you can find out the property tax you need to pay from April 1, 2023.
Let’s decipher these nine factors:
Municipality Type Factor (MTF)
The MTF for Municipal Council would be 0.75 while for a Municipal Committee, it would be 0.5.
Land Value Factor (LVF)
The LVF is one tenth of the unit area value of land in Rs lakh per kanal of land as notified under J&K Preparation and Revision of Market Value Guideline Rules, 2011 as on 1st April of the base year of that block of three years. e.g. for the first block from 1 April, 2023 to 31″ March, 2026, if the per kanal value of land as on 1 April, 2023 as per the aforementioned value guidelines is Rs 60 lakh, the LVF would be 6 during the three financial years of the block
Area Factor (ARF)
The ARF is the built area or the vacant area in respect of which the tax liability is being calculated, as the case may be, in square feet.
In the case of Property tax on built area, it refers to the total covered area of that floor in square feet.
In case of areas with winter snowfall, the area of the attic shall not be counted in built-up area.
In the case of Property tax on vacant land not appurtenant to a building, the area of the vacant land in square feet shall be entered.
In the case of Property tax on vacant land appurtenant to a building, the area to be entered in the formula shall be the area, in square feet, in excess of two times the built-up area of the ground floor.
Floor Factor (FF)
For calculating the liability of different floors and vacant land abutting the building, the floor factor would play a crucial role.
The Floor Factor for Residential buildings including flats will be 1. For other buildings, the floor factor for Ground floor will be 1, First floor will be 0.8, Second floor will be 0.7, Third floor and above will be 0.5, and for Vacant land will be 0.1. The floor factor for basements for all types of buildings will be 0.5.
Usage Type Factor (UTF)
For vacant land appurtenant to a building, the UTF would be the same as that of the building itself. Where different portions of a building are put to different uses, property tax for the built-up area as well as the taxable vacant appurtenant area would be separately calculated, proportionately, for each area under a particular use.
The UTF for different usage types would be 2 for Residential apartment/ flat, 2.5 for Residential house, 5 for Industrial (Manufacturing), 7 for Institutional/Public/ Semi Public, 12 for Commercial, except 3 star and above Hotels, towers & hoardings; and 15 for 3 star and above hotels, towers & hoardings.
Construction Type Factor (CTF)
The CTF will vary on the basis of the predominant and substantive nature of the construction. Its value will be 1 for RCC construction, 0.9 for Pucca (without RCC) construction, 0.8 for Prefabricated structure, and 0.6 for Kuccha/Bamboo/Wood/Tin Structure.
Age Factor (AGF)
The AGF will be 1 for buildings which are 0-20 years old, 0.9 for 20-30 years old, 0.8 for 30-40 years old, 0.7 for 40-50 years old, 0.6 for 50-60 years old and 0.5 for buildings more than 60 years old.
Slab Factor (SF)
The value of slab factor will vary on the total built-up area calculated as in Area Factor (ARF).
For Residential houses and apartments, the SB will be 0 for upto 1000 square feet (sft), will be 0.75 for above 1000 sft upto 1500 sft, 1 for above 1500 sft upto 2000 sft, 1.15 for above 2000 sft upto 2500 sft, 1.3 for above 2500 sft upto 5000 sft and 1.5 for above 5000 sft.
Other usage types, the SB will be 0.5 upto 100 sft, 0.75 for above 100 sft upto 250 sft, 1 for above 250 sft upto 500 sft, 1.15 for above 500 sft upto 1000 sft, 1.30 for above 1000 sft upto 2500 sft, 1.5 above 2500 sft upto 5000 sft and 2 above 5000 sft
Occupancy Status (OSF)
The OSF value will be 0.75 for Self-occupied for more than 6 months, while for others it would be 1.
Once you have figured out all these nine factors, multiply them to obtain the Taxable Annual Value.
Taxable Annual Value (TAV) = MTF x LVF x ARF x FF x UTF x CTF x AGF x SF x OSF
For residential property, the property tax will be 5% of the TAV.
For non-residential property, the property tax will be 6% of the TAV.