Associations in Andhra Pradesh have planned agitations and protests against the state government’s decision to change the property tax calculation system. The government passed orders to shift the system from a rental value based system to calculating tax based on market value of the asset. This change is likely to raise property taxes significantly and increase the burden on households. The rationale behind adoption of the reform was to raise the borrowing limit of the state government.
The Federation of Residential Welfare Association (RWA) and the Andhra Pradesh Pattana Poura Samakhya have demanded the government to recede the orders and have called for statewide agitations. The RWA has stated that it is opposed to raising tax burden on people to make room for the government’s expenditure. Whereas the Samakya convener declared that they would organise protests on December 28 and 29 in front of village and ward secretariats. The organisation was inspired by the farmers’ protests in the country and decided to intensify the protest against the increase in property tax.
Under the new system, property taxes will be determined based on the capital value of the land and building as fixed by the Stamps and Registration Department. This value increases almost every year thereby increasing the burden of tax on the people. The current system levies a tax only on the building, while under the new system tax will be imposed on the land under the building as well. Additionally, the rental value system imposed a higher tax in commercial areas while the new system will increase tax obligations for homeowners as well.