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The Brihanmumbai Municipal Corporation (BMC) house has approved a proposal to raise the property tax exemption limit for residential units from 500 sq ft to 700 sq ft. If cleared by the Maharashtra government, the move will extend full tax relief to nearly two lakh additional homes, taking the total exempt properties in Mumbai to around 17 lakh. While the proposal is expected to benefit middle-class and small homeowners, it could increase the civic body's annual revenue loss from about INR 400 crore to nearly INR 700 crore.
The Brihanmumbai Municipal Corporation (BMC) house has approved a proposal to increase the property tax exemption limit for residential units in Mumbai from 500 square feet to 700 square feet. The resolution has now been forwarded to the state government for final approval, as changes in tax structure require clearance from the Urban Development Department. Advertisement
At present, residential properties measuring up to 500 sq ft are fully exempt from property tax. This exemption was introduced in 2022 following a state government directive and has benefited nearly 15 lakh housing units across the city. With the proposed increase in the threshold to 700 sq ft, around two lakh additional residential properties are expected to qualify for full exemption. If implemented, the total number of tax-free homes in Mumbai could rise to nearly 17 lakh.
The proposal was introduced in the civic house and passed without opposition. Elected representatives stated that the move was intended to provide relief to middle-class families and small homeowners who are facing rising household expenses. They indicated that expanding the exemption would reduce the recurring financial burden on residents living in modest-sized homes, including many in older buildings and rehabilitation projects.
Civic officials have noted that property tax remains one of the BMC's largest sources of revenue. The exemption up to 500 sq ft has already led to an estimated annual revenue impact of around INR 400 crore. With the proposed expansion to 700 sq ft, the yearly revenue loss could increase to nearly INR 700 crore, depending on final calculations and implementation structure.
A similar proposal had been passed in the civic house in 2018, seeking relief for homes above 500 sq ft, but it did not receive state approval at that time. The current move marks a renewed effort to expand the benefit.
The final decision will rest with the Maharashtra government. Only after state approval will the revised exemption limit come into effect and be reflected in property tax assessments across the city.
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