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Property Tax Taxonomy

Complete taxonomy for Property Tax applications

Entities and Categories

This section outlines the key entities, properties and major categories associated with the Property Tax governance component. It summarizes their categorizations and sub-categorizations and values. The categorizations primarily establish hierarchical relationships that can be established and as a whole yield taxonomies around Property Tax.
The illustration above offers a consolidated view of the key components and entities defining the Property Tax system.
While building the knowledge models for Property Tax systems, it is imperative to consider entities that are interlinked with Property Tax. Property Tax is a type of Revenue charged against a property. Collections operationalize the Revenue mobilization within a ULB. Hence taxonomy for Property Tax cannot be built in a silo and needs to be accompanied by entities like Property, Revenue and Collections.
Property Entity Details

Key Terms & Definitions

Property ID

Property: It is an immovable real asset with clear ownership, which can be
a) A Land Parcel by itself or
b) A Land Parcel together with built structure or part of it along with its share of the land parcel
A property is transferable by law or deed and can be put to a designated use.
Property ID: An identifier that uniquely represents a specific Property comprehensively

Ownership

Ownership is an important characteristic of Property and impacts many other processes surrounding Property Tax like exemptions, assessments etc.
Owner: the entity who/ which has the legal title over an item (Such as a property, document etc.) on which entity has the right to enjoy as far as law permits unless prevented by some agreement or covenant (like leases) which restrains the entity's rights. The Owner of a Property can be Individual/s or an organization.
Individual: A person, a group of persons having a legal interest in the property
Organization: An organization, or organization, is an entity – such as a company, an institution, or an association – comprising one or more people and having a particular purpose.

Location

Location: The geographical position where the Item (here Property) is situated on the Earth. This can be expressed as an Address, Digital ID or as Geo-Coordinates. Location can fall under different jurisdictions which are captured in the fields characterizing the location.
Address: The commonly used Postal address with door number, street name, Locality, City, PIN Code, State, Country Combination
Geo-Coordinates: These are the Geographical Coordinates that can be expressed as a Point (Latitude/ Longitude) or a Polygon on a base map of the ULB.
Digital Door Number: Some ULBs have issued Digital Door Numbers to Properties based on some scientific and unique way to identify a property. This is normally restricted to the building and not Each property unless the entire building/ group of buildings is the property.

Property Composition

Property Composition: The Property Composition can be land by itself OR it can be together with the built structures on top of the land. The Built structure can be a building/ group of buildings or part of a building with a share of the underlying land.
The Appropriate combination of the property which can consist of the built structure together with its land/ share of landforms the property composition
Unit: Part of the Property with a unique Combination of traits such as Usage, ownership, Occupancy, structure type etc. is called a Unit. A combination of such units for the Property.
E.g. (1) - If the Property is an Apartment in a Building which is used for Residential purposes, occupied by the owner and one room is sublet to a tenant. The units of the property could be
  1. 1.
    The Share of Land for the Property (the apartment)
  2. 2.
    The Room which is rented out
  3. 3.
    The remaining part of the Apartment which is occupied by the owner
The reason there are 3 units is - the underlying land/share of land always forms one of the units. Units (b) and ( C) are separated because the Occupancy is different and the ULB law might compute taxes based on occupancy type.
E.g (2) - The Property Could be an Independent building wherein the ground floor is used for commercial purposes and the first floor is used as a residence by the owner. The units for the above can be
  1. 1.
    Underlying Land for the independent building
  2. 2.
    The Ground floor which is used for commercial purposes (first use)
  3. 3.
    The First floor which is used for the residential purpose (Second use)
Land: Part of the Earth surface which is not covered by a body of water.
Land Parcel: a plot or tract of land with a clear area and well-defined boundaries.
From a property perspective the underlying land with clear boundaries on which the property is situated.
From a GIS mapping perspective, a land parcel is designated as a single point (as the center) or more accurately in the form of a polygon depending on the purpose.
Share of Land: This is a proportional share of the land area (based on local laws or agreements) when multiple properties are built on the designated land parcel. This is often indicated as a % of the land parcel.
While the exact share of the land area may be quantified, in many instances, the exact boundaries of the share are not demarcated clearly.
Land Use: The activity or purpose for which the land is determined to be employed.
For the purpose of Property Tax, this is a piece of mandatory and important information, when the Land is Vacant but can be optional if there are built structure/s on it
Unit: Part or Portion of the Property (with clear demarcation) for which at least one of the property tax factors (Use, Occupancy, Structure category, Age etc.) is different is called a Unit of the property.
For e.g. in a Single Property - there could be 3 units such that (with Different usage and occupancy)-
The ground floor may be used for commercial purposes & rented out whereas the first floor is used for residential & Tenanted and the second floor is residential and self-occupied. TValue determined (ARV, CV) for each unit together contributes towards the Value for the property on which the Property tax is computed.
If the property is homogeneous (all values are the same, then the property will have only One Unit).
Unit ID:
Building ID: Is the Identified assigned to represent a Specific Independent structure
- this can be a part of a large property OR the can contain several properties within that specific structure.
Age: This is the time period between the Current Date & the date based on a clearly Identified event, based on the local Law / ACT. This date can be the date of completion of construction or the date when the Occupancy certificate was issued for the property.
Age is normally computed for Built structures on the property and not for the Land itself. Age is often used to determine the Depreciation/rebates etc based on the Property tax laws of the ULB
Occupancy: It depicts the current resident/user of the Property or part of it. This is independent of the Owner or the Usage of the property
Structure Category: From a Property Tax viewpoint, the Structure of category is based on the Longevity/permanence of the Property or the relative strength of its built structure
Structure Components: Key Constituents that make up the built structure. From Property Tax assessment perspectives the Wall, Floor, roof are regarded as the key components
Floor: The lower surface of the room/ property on which one may walk is called the floor.
Wall: Vertical surfaces erected to create a space enclosure to provide protection/ privacy or merely to demarcate is called a wall.
Roof: The structure forming the upper covering/ surface for the property/ part of the property
Unit Use: The purpose for which the Unit is put to use
Residential: A structure that is designed for people to live in.
These include a building in which sleeping and living accommodation is provided for normal residential purposes, with cooking facilities and includes one or more family dwellings, apartment houses, flats, and private garages of such buildings (Ministry of Housing & Urban Development, 2016).
Industrial:
Commercial: These includes a building or part thereof used as shops, stores or markets for display and sale of wholesale and or retail goods or merchandise, including office, storage and service facilities incidental thereto and located in the same building. (Ministry of Housing & Urban Development, 2016).
Heritage:
These include any building of one or more premises or any part thereof
and/or structure and/or artefact which requires conservation and/or
preservation for historical and/or architectural and/or artisanry and/or
aesthetic and/or cultural and/or environmental and/or ecological purpose
and includes such portion of land adjoining such building or part thereof as
may be required for fencing or covering or in any manner preserving the
historical and/or architectural and/or aesthetic and/or cultural value of such
building (Ministry of Housing & Urban Development, 2016)
Institutional:
Utilities:
Dimension:
Unit of Measurement:
Value:
Evidence:

Property Tax

Assessment Method

Assessment Method: Method by which the state / ULB determine the Property Tax for properties within the ULB.

Property Tax Period

Property Tax Period:
Financial Year:
Frequency:

Property Zone

Property Zone: This is a combination of factors that contribute to determining the Property Tax based on the chosen Valuation method.
Valuation Rate: The guidance rate issued by the Appropriate authority which the ULB uses to Determine the Value on which the Property Tax Rate is applied. The valuation rate/guidance rate is published by the Govt Authority. (Can be from Non-ULB departments like Registration, PWD etc.)
Zone Combination - Boundary combinations based on which Valuation Rates or Guidance Values are published by Departments such as Municipal, Registration or PWD. It might be typically a combination of Ward/Zone/Locality/ Door number etc. as finalised by the publishing authority.
Land:
Structure Combination: is the combination of Building structure in which the valuation rate is published for the Governing authority. (These rates are usually published by the Registration / Pwd department in most states based on Age, usage etc..) Sometimes they are independent of the Usage/ structure category/components as mentioned in the Property. This is mainly because of potential differences in the definition of these terms as per the publishing authority and the ULB.
Structures:
Property Tax Rate: This is the rate that is applied on the Valuation arrived by the applicable Assessment Method (like ARV, UAM, Capital Value). These rates are typically finalized by the ULB

Property Bill Constituents

Arrears: Arrears are the Property Tax liabilities that have accrued because of payment not being received by the due date.

Property Tax Components

General Tax:
Cess:
Other Taxes:
Other Charges:

Property Processes

Enumeration: These are attempts by the ULB to increase coverage (Adding new properties into their database). These are often specific efforts done periodically or through special intervention like GIS-enabled Property Surveys and these are then assessed to determine property tax.
New Assessment: Property Tax assessment done for the first time for a property in line with ACT and rules for the ULB. These can be initiated by the CItizen or by the ULB
Typical Output: Property Tax ID, Property Tax Demand Notice
Reassessment: Process to determine new tax value for an existing property based on changes to usage, dimensions, occupancy, demolition or merging the property with adjacent property or dividing the property into 2 or more parts etc.
Addition / Alterations: These are changes to Property Sub Units (Additions or Alterations) or the change in its Usage.
These could be initiated by the Property Owner or the ULB authorities.
Typical Output: Reassessment Notice and Revised Demand
Amalgamation: This happens when multiple properties are modified into a single property. With this One Single New Property is created and older properties are deactivated for clear reasons. This process results in an issue of Deactivation notice and issue of New Assessment Notice with appropriate Property Tax demand.
Bifurcation: Properties are split into 2 or more parts for reasons such as inheritance by multiple individuals or Partial sale. This results in the division of the property into 2 or more parts. In such cases, One part of the Bifurcated property retains the Original property ID but the others acquire a newer ID.
Demolition: Dismantling the Structure or part of the structure which change the property tax to be levied on the underlying land and part of the remaining structure OR as a result of this, the Property Tax is only levied on the land (if the entire structure is demolished) A typical output of this is a Demolition Order / Revised demand. This can be initiated by the Owner or the ULB
Mutation: Change in ownership of property. These could be for many reasons such as "sale of property" or because of "inheritance". This could be Initiated by the new owner or as a trigger from the registration department.
Typical Output: A mutation certificate
General Revision: When the ULB initiates a change of the Property Tax assessment based on a Periodic increase in rates (as required by Rules/ Acts).
Typical Output: General Revision Notice
Vacancy Remission: Property Tax discount sought by citizens because the Property has been vacant for a stipulated period. These are typically initiated by the owners.
Typical Output: Vacancy Remission notice and reduced demand for that period
Exemptions: Properties are given exemptions based on the Rules of the State. These could be for religious usage or for properties owned by war widows etc.
Typical Output: Exception Notice
PT Grievances: Complaints from Property Owners regarding Property Tax related issues (excluding disputes on the tax amounts)
a) Did not get a receipt through the Credit card was charged
b) Dues are still showing even though payments are already made
c) Money debited in my account but is not reflecting in the dues statement
PT Dispute Resolution: These are complaints regarding the Tax amount charged, which takes into consideration, appeals, appellate and court cases to get to a resolution.
E.g.
a) Property Usage showing as commercial instead of residential
b) Mistakes in Property Dimensions
c) Court Cases against Property Assessment

Revenue

Type of Revenue

Revenue: It is the Income Earned by the Governing Body
The revenue could be earned as Tax, Service charges, fees etc.
Type of Revenue: The governing body can have several sources of revenue as provided in the laws/Acts.
An empowered Local Government like a ULB can create its own revenue sources. In addition, it also receives revenue share from other government bodies as per the prevailing ACTs in the state. For e.g. in many states, the Registration department has to share the revenues from Property Registration in specific proportion if the Property lies within the ULB Jurisdiction.
Permission-Based: Income earned from providing permissions/licenses for specific activities are called permission-based revenues.
E.g. Building Plan Approval, Trade License, Road cutting, Movie Shooting
Tax Based - Income earned by levying tax is called Tax based revenues.
These are enforceable by law.
Eg. Income Tax, GST, Property Tax, Water Tax, Scavenging Tax, Lighting Tax etc.
Service-Based: Income earned by the provision of specific Services are Service based revenues.
For e.g. Electricity Charges, Water Charges, Sewerage Charges, Solid waste pickup etc.
Sale Based: Income earned from Selling certain goods/assets are called Sale based revenues
E.g. Resale of assets, Provision of medicines at discounted prices etc.
Ad Hoc Charges: income that is earned for information provision, fees or fines.
E.g. Fines for Spitting on roads, Fines for Debris creation, Tender Fees
Share from Other Departments:

Account Head

Account Head: The Chart of accounts relevant to the compliance to local / state and Central finance function
Department Account Head: The appropriate revenue heads to which this revenue should be recognized by the Payee.
For e.g. the Account head relevant to the ULB which are say compliant with the NMAM standards
State / Center Account Head: These are account heads to which the Payee organisation has to report the revenues to the state/ centre.

Payer

Payer: is the responsible person/ organisation who has to remit the due amount
Individual:
Refers to the person who has to pay. In the context of property tax, this could be the owner of the property as identified under the Property Tax laws.
Organisation
A formal entity created for a specific purpose can have rights and obligations based on the kind of entity created. The formed entity will have clearly defined owners. This can be a company, trust, institution etc.
Private Organization:
A type of organisation where the owners are individuals or companies as opposed to government
Government Organization:
Organisations that are owned/ run by the Government
Public-Private Organization:
Organisation where the ownership is jointly held by government and private entities

Payee

Payee: The governing body which is authorized to collect the revenue as per prevailing Government provision or laws.

Ultimate Payee

Ultimate Payee: The final recipient of the amount to whom it is due irrespective of the actual payee.
This concept might be needed, where the amount collected by the payee is supposed to be earmarked for the ultimate payee.

Amount Due

Amount Due:
The quantum of money that is owed by the payer for the period, or services availed

Collection

✐ Note: The above diagrams are indicative representations, the key elements of classification structure can be referred to in the Classification Tables.

Collection Channel

Collection:
Collection Channel:
Counters:
Portals:
Mobiles:
Market Places:
Door to Door:

Mode of Payment

Mode of Payment: The Instruments used by the Payer ro remit the amount to the Payee.
Physical mode: Paper based instruments which are approved by the ULB.
These can include Cheques, Demand drafts, Challan etc.
Digital: The electronic Mode of Payment where money is transferred in a digital mode to the payee's account.
These can include Bank Transfers, Credit Card, Wallets, Debit cards etc.

Service Provider

Service Provider: An agency or an Organization which is designated/empowered to collect monies from Payers.
Government Service Provider:
Private Service Provider:
Public- Private Service Provider:

Amount Collected

Amount Collected: This is the money to be received by the governing body from its citizens against taxes, permissions and services; also known as demand in case of Property Tax.

Appendix

Parameters and Specifications in Property Tax

Measurements

Type of Property
Area of Measurement
Representation on Map
Vacant Land
Polygon Area (m2)
Polygon
Built Structure
Builtup Area of Premise (m2)
Polygon, Centroid
Appurtenant Area (m2)
Polygon, Centroid
Height of built structure
Key terms and Definitions
Appurtenant Area: Anything attached to a piece of land or building such that it becomes a part of that property, and is passed on to a new owner when the property is sold. It may be something tangible like a garage, septic system, water tank, or something abstract such as an easement or right of way.

Location

Type
Location Specification
Address
House No, Building Name, Plot/Survey No, Street Name, Locality, Zone/Ward, City/Town, District, Region, State, Country, Pin code
Geo Location
Lat, Long, Polygon
Digital Door Number

Key terms and Definitions

Address: The address of the property provides the particulars of the place as per the administrative boundaries or norms defined by the local governing body.
Geo Location: Geolocation is the identification or estimation of the real-world geographic location of the property. This refers to the latitude and longitude coordinates of a particular location where the property is located.
Digital Door Number: Property Numbers are defined using scientific methods and often assigned with QR codes for traceability and usability.

PT Calculation Methods

Calculation Methods
Parameters
Capital Value System
The Market Value of the property, Total Carpet Area, Weight for Construction Type, Weight for Age of Property, Weight for User Category, Current Rate of Property Tax
Unit Area Value System
Base Unit Area Value, Covered Space/ Land Area, Location Multiplicative Factor Value, Age Multiplicative Factor Value, Structure Multiplicative Factor Value, Occupancy Multiplicative Factor Value, Rate of Tax
Annual Rent Value System
Monthly Rent Notified by ULB, Plinth Area, Construction Type, Usage Type

Key Terms & Definitions

Capital Value System: The market value of the property is the basis of estimating the taxes to be paid. This market value is determined by the government and revised annually, based on the ward in which the property is located.
Unit Area Value System: Under this system, the tax is levied on the per-unit price of the carpet area or the built-up area of the property. Municipalities like New Delhi, Bangalore, Kolkata follow this method.
Annual Rent Value: It is the amount of the property which might be let out on a yearly basis. In the case of self-occupied property used for staying by the owner, then the value is zero. In a situation where the owner is neither staying nor letting it out then also, the value is zero. The gross annual rent of the property is fixed by the municipal body which is generally higher than the actual rent received or expected rent. The municipality of Chennai and Hyderabad use this method

Payment Gateway

Payment gateway is a trusted financial intermediary which facilitates secure digital fund transfer between parties involved and keeps them informed on the status of transactions throughout the lifecycle of transactions.

Classification Tables

Property

Level 1
Level 2
Level 3
Property ID
Owner
Individual
Single
Multiple
Public Organization
Central Government
State Government
Local Government
Other Government Organizations
Private Organization
NGO
Private Trust
Other Private Institutions
Private Company
Private Board
Public Private Organization
Location
Geo Coordinates, Address, Digital Door Number
Property Composition
Land
Land Parcel Measurement
Share of Land in Property
Land Use
Unit
Unit ID
Building ID
Age - Date of construction / Date of Occupation
Occupancy - Self Occupied / Rented / Leased / Vacant
Structure Category - Permanent / Semi Permanent / Temporary
Structure Components - Floor / Wall / Roof
Unit Use - Residential / Industrial / Commercial / Heritage / Institutional
Measurements

Property Tax

Level 1
Level 2
Assessment Method
Property Tax Period
Financial Year
Frequency
Property Zone
Valuation Rates
Zone Combinations - Ward, Block, Locality, Door, Road
Structure Combinations - Building Type, Usage
Property Tax Rates
Property Bill Constituents
Current Year
Arrears
Advances
Rebates
Interest
Penalty
Property Tax Components
General Tax
Cess
Other Taxes
Other Charges

Property Processes

Level 1
Level 2
Enumerations
New Assessment
Re-assessment
Additions / Alterations
Amalgamation
Bifurcation
Demolition
Mutation
General Revision
Vacancy Remission
Exemptions
PT Grievances
PT Dispute Resolution

Revenue

Level 1
Level 2
Type of Revenue
Permission based - Trade license, Building plan approval, Road digging
Service based - Rentals, Water charge, Solid waste disposal
Tax based - Property tax, Water tax, Lighting tax
Sale based - Assets sale, Goods sale
Adhoc - Fines for dustbins, Tender Fees
Share from other Departments - Registration Fees
Account Head
Department Account Head
State Account Head
Payer
Individual
Private Organization
Government Organization
Public Private Organization
Payee
Ultimate Payee
Amount Due

Collection

Level 1
Level 2
Collection Channel
Counters - ULB, Revenue Dept, Bank, Registration Office
Portals - State, ULB
Mobile
Market Places - Paytm, Axis
Door to Door
Mode of Payment
Physical
Digital
Service Provider
Private
Government
Public Private
Amount Collected