Tax relief for buyers; KMC to seek undertakings from promoters during construction
Telegraph | 14 March 2025
The Kolkata Municipal Corporation will ask developers for undertakings that they will clear their property tax while a building is under construction. The civic body will stop the construction if the tax is not paid for four quarters.
The decisions have been made to end the practice of not clearing taxes by developers and shifting the tax burden on the new owner after the property changes hands.
The unpaid dues often come to light when the new owners approach the civic body for mutation to record their names against the property.
KMC sources said the new owners often plead to the civic body that they should not be asked to clear the outstanding dues.
“Anyone purchasing a new property should find out whether all outstanding dues have been cleared, but many still do not follow the process,” said a KMC official.
“We are now trying to fix the loopholes so that there are no property tax dues when someone buys a property,” added the official.
Sources said many developers, especially those of standalone buildings, do not obtain a completion certificate (CC) from the KMC. Linking the CC to clear outstanding dues does not help in such cases.
An undertaking and the threat to stop the construction could have a better impact, said KMC sources.
“An undertaking has to be submitted by the owner(s) and developers of the premises that responsibility for completion of all pending assessment and payment of property tax liability lies with the developer for the entire building and land for the period prior to completion of the building and handing over the flats to the intending purchasers,” a circular issued by the municipal commissioner in February said.
A specific agreement between the developer and owner making the owner liable for the payments will stand, the circular mentioned.
“The owner(s) and developer shall also undertake that in the course of construction of the building, if property tax is found outstanding for any 4 (four) quarters, the Corporation shall be at liberty to issue stop work notice,” the municipal commissioner’s circular said.
Henceforth, the building plans approved by the KMC will also mention that the liability of paying any outstanding taxes will fall on the new owner.
“It should be mentioned in the sanctioned plan by stamping/writing to make the purchasers of the flats aware that the responsibility of the pending tax for their share of land and building will pass to them and hence before buying they should check as to whether the owners/developer has cleared all dues,” the circular said.
KMC officials said if an old building with single ownership is pulled down and a new building with multiple comes up on that land, the liability of unpaid taxes gets divided among all owners, but none can deny paying the dues.
“If there are ten flats, each flat owner will have to pay 1/10th of the outstanding tax,” said the official.
The official advised that interested buyers should enquire with the KMC about outstanding taxes. “They can come to KMC’s assessment department office to check outstanding taxes. If they have the assessee number, they can also check on our website,” said the official.