The Colombo Municipal Council (CMC) intends to auction around 867 private properties, if the owners ignore its final warning to them to settle their property tax arrears by March 31, Colombo Mayor A.J.M. Muzammil warned.
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| A.J.M. Muzamil |
“If the taxpayers do not pay their rates, we have the right to seize their properties, as has been done in the past,” he said.
Up until recently, the CMC was faced with a staggering Rs 2.5 billion in tax arrears, with balances carried forward for the past 25 years. Of this amount, around Rs 1.5 billion owed by State properties has been settled, CMC Treasurer K.D. Chitrapala said.
Mr. Chitrapala said that the CMC has the authority to seize private properties if they default on payments, but not government properties. In such instances only warning letters can be sent.
The CMC revises the property tax rates every five years, in keeping with the rise in the value of real estate.
The CMC revised the value of 10 municipality wards recently, effective January 31, 2012. The rates are calculated at 35% of the annual value for commercial properties and 25% for residential properties. The tax on non-developed commercial and residential properties will be 25% and 15% respectively.
The wards for which the rates were revised are Aluthmawatha, Lunu Pokuna, East and West Kotahena, New Bazaar, North and South Borella, Kollupitiya, Bambalapitiya and Cinnamon Gardens.
Accordingly, a property owner in Bambalapitiya municipality ward who paid Rs 6,696 in 2011, is required to pay Rs 8,640 under the revised rates for 2012.
Colombo Municipal Assessor, Jayantha Jayasekera said the rates were calculated on the basis of the market value of property in each ward, along with which the value of each property too is evaluated.
Owners are required to pay their property taxes in four quarterly payments each year, and hence, the amount due for the first quarter is payable by March 31. The Municipality grants a 10% discount, if the tax for the entire year is paid before January 31, and if a quarter is paid in advance in the previous quarter, a 5% discount is granted.
They are also required to inform the Municipal Assessor if a residential property is converted into a commercial property, or vice versa, as there is a marked difference in the rates payable, if there is such a change in the status of the property.
Meanwhile, Mayor Muzammil said that the municipality has not imposed charges on one establishment within the Port up until now, but thus will change soon.
“There are businesses taking place within areas that are allocated for ports. Within the Colombo port, there are two cement factories, grain elevators, a flour mill and dockyard, which are huge commercial establishments,” he said.
The CMC is now in the process of assessing the value of these establishments, he added.
The CMC’s biggest income comes from rates and taxes it collects annually, of which, a big chunk comes from property taxes. In 2011, the budgeted property tax revenue was Rs 3,000 million, while this year it is expected to increase to Rs 3,080 million, the Mayor revealed.
He assured that the revenue collected would be used for the benefit of the people, by way of programmes such as developing the road network, beautification of the city, collection of garbage and dengue eradicating programmes. |
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