Property Tax

What is Property Tax?

A property tax is a annual charge that is imposed by the Government from the property owners of different properties such as residential properties, office premises, which is can be self-owned or rented out to other people. The property tax can be collected by either the Local Government or the Municipal Corporation, whoever is authorized to collect the same in any particular state. The property tax is similar to all taxes which are collected by the authorities to fund the developmental and infrastructural activities, like roads, highways, sanitation, etc.

How Property tax is Calculated?

A property tax is not unified across the whole country, and thus, it differs across different locations, cities, and states. So, different tax collecting bodies have different ways to determine the property tax. However, a general guideline regarding the calculation of any property tax is based on the following formula:

Property Tax=Base value*Built up area*Age of the property*Type of property/building*Category of usage*Floor factor.

Thus, the factors such as the base value of the Land; occupancy factors whether self-owned or rented; Type of property whether residential or commercial; the age of the property or the year of construction; Construction type whether multi-floored or single floor etc. These factors determine the property tax across different states and locations. Based on these factors only, one can calculate the property tax he or she is bounded to pay, using the property tax online calculators, which are available at the Municipal corporations’ online portal of the respected State.

Moreover, a property tax is calculated through different methods which are listed as follows:

  • Capital Value Systems: As per the Capital value system, the property tax is calculated as per the market value of the particular property that is decided by the Government based on where the property is located. A particular percentage of the market value is estimated as the property tax to be paid by the Property owner.
  • Unit Area Value System: Unit area value system estimates the property tax on the grounds of the per-unit price of the built-up area across the property. The price of the property, in this case, is decided based on the factors such as land price, usage of the property, and its location. As the price is estimated, it is multiplied by the Built-up area covered on the property.
  • Annual Rental Value System: Annual rental value system is also called as the Ratable value system. As per this method, the property tax is collected on the basis of the rental value of the particular property that is collected each year. The rent, in this case, is not the actual amount collected by particularl, indeed, it is the rent estimated by the Municipal corporation on the basis of location and size of the property. Apart from these, the distance of the property to the amenities and landmark places is also a important factor in deciding the rent of the property.

Methods to Pay House Tax

A house tax or property tax can be paid offline and online both, as per the convenience of the property owner. A detailed description of this process is listed down below:

Pay Property Tax Online

One can pay property tax online by following the below mentioned steps:

  1. Log in to the official portal of the Municipal corporation of your particular city/state.
  2. Choose the option ‘property tax’ and move to the payments option.
  3. After that, fill in the right property tax form, that is the form 4 or form 5, based on the property type and the category.
  4. As you fill the form, choose the assessment year, that is the year for which the tax is to be calculated and paid.
  5. Proceed further to fill the Property identification number, Property documents and other required information such as the owners name.
  6. After filling all the required information, move further, by choosing the Mode of payment, amongst the options provided such as debit/credit cards or Net banking.
  7. On successful payment, a challan is generated on the screen. Take the print out of the generated challan for Future References.

Pay House Tax Offline

To submit your property tax offline, you are required to visit the Office of the Municipal corporation of your city. Apart that, one can pay a property tax on the designated Bank branches. Offline payments of the property tax can be made through Cash or Cards.


Property Tax, also known as House Tax, is the tax levied on real estate owners by the municipal authorities like Panchayat, municipality or municipal corporation. It is used for the maintenance and upkeep of the local civic amenities of the particular area, like roads, sewage system, lighting, parks, and other infrastructure facilities. It is usually imposed on all real estate, including buildings (residential or commercial), attached land, and improvements made to the land, but not on vacant plots of land with not any adjoining building.

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Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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