Tenants, Resale Buyers To Feel The Pinch More Than New Home Buyers
The Thane Municipal Corporation’s (TMC approved property tax hike — 12% for residential and 20% for non-residential properties — is set to raise the cost of holding property in the city, but its impact will be uneven across segments.
Former President of Thane Estate Agents Association (TEAA) Mr Lawrence Anthony Shetty says the primary sales market may see only a limited direct impact. “Developers are unlikely to revise base prices due to the hike, as property tax is a post-possession recurring cost “ he explained.
The real pressure, however, is likely to be felt in the rental and resale markets.
For homeowners, the hike increases annual holding cost. In a city where rental yields are already under pressure, owners are expected to pass on a part of this additional burden to tenants through higher rents, explains Lawrence Shetty.
Similarly, in the resale market, prospective buyers are likely to factor in the increased recurring outgo while negotiating deals. “A higher annual tax liability could become a bargaining point, especially in older housing societies where maintenance is already
high,” he added.
The impact could be sharper for commercial real estate. With a steeper 20% hike proposed for non-residential properties, occupancy costs for shops, offices and warehouses will rise. “This could weigh on rental yields, lease renewals and fresh investment decisions, particularly for small businesses and retail,” said the former TEAA President.
Much like the recent property tax revision in Mumbai which is expected to have a cascading effect on overall real estate sentiment in the MMR, Thane’s move adds to the overall cost of owning property.
Ultimately, the long-term impact will hinge on execution, feels Mr Shetty. “If the additional revenue translates into tangible improvement in roads, water supply, waste management and public infrastructure, it could strengthen Thane’s liveability index and support property values. If not, it will be perceived as just another cost without corresponding benefit,” he concludes.
