The recent imposition of property tax on commercial properties can tip the scales for this recession-hit realtysegment.The bhupinder singh hooda government may have kept populism in mind while coming out with a revised formula for the imposition of the property tax on the residential properties I the state. However, when it came to imposition of the property tax on the commercial and institutional buildings, purely economic reasons for minting money weighed heavily on its mind.In fact, in a big blow to the large commercial buildings, including office complexes and shopping malls-cum-multiplexes, the amount of the property tax has in effect group up from April 1, 2010- when the property tax was discontinued. Despite the talk providing incentives to the commercial building to the boost trade and industry, the commercial segment is hard-hit(see adjoining tables)“the impositions of the hefty property tax on commercial property would deal a death blow to the mall culture which is already passing through recessionary phase. It would have disastrous effects on the state’s economy in the long run as the commercial ventures would move out from the state,” said harish gupta, a director with a gurgaon-based company.

A promoter of an educational institution in ambala district alleged that the “lopsided” formula to tax the institution was a move of the state government to check the mushrooming of a large number of educational institutions in the state, particularly along the national and state highways. “the new rate are discriminatory and illogical and need to be rolled back immediately,” he demanded.

On June 1, the chief minister announced that a nominal amount of re 1 per sq yd will have to be paid as property tax on residential properties up to 250 sq yd. a majority of 83 percent of residential properties in the state fall in this category.

A senior government functionary conceded that a lion’s share of the proposed property tax would come from the commercial and institutional buildings. The notional property tax on the residential buildings has been imposed to get central grants which had been blocked after the “suspension” of property tax on April 1,2010. grants amounting to over rs 750 crore, particularly under the Jawaharlal Nehru national urban renewal mission (JNNRUM) have been held up by the center as the flow of these grants is linked to urban reforms, including the imposition of the property tax. Since a large number of categories such as religious properties (only on real religious structures), orphanages. Alms houses, municipal buildings, cremation and burial grounds, all residential buildings up to 250 sq yd owned by ex-serviceman or families of deceased soldiers and ex-central paramilitary forces personnel enjoy 100 percent rebate, the government would only get nominal amount from the residential sector. Similarly, non-RCC construction and properties more than 25 per cent concession would be given. There would be given. There would be no property tax on a plot of one acre and above if used for cultivation.