Government may tax vacant land to check hoarding

The Central government is planning to impose tax on vacant land aimed at checking large scale hoarding of land, according to a newspaper on Friday.

Updated: Apr 06, 2012, 20:24 PM IST

Zeebiz Bureau

New Delhi: The Central government is planning to impose tax on vacant land aimed at checking large scale hoarding of land, according to a newspaper on Friday.

The vacant land tax is also aimed to generate resources to revamp the ailing urban infrastructure, the paper reported.

A steering group of the Planning Commission in a draft proposal has suggested imposing the new tax on vacant government land too. The group has further suggested that the new tax should be based on "ready-reckoner capital value" and could be charged at 0.5% of the total value.

Andhra Pradesh and Tamil Nadu have already started collecting such taxes in its cities. While states like Punjab and Bihar are thinking of imposing a similar tax to curb hoarding and check escalating property prices.

The Plan Panel group has sought much-needed reforms in property taxes while suggesting a slew of measures to financially empower urban local bodies, including changes in the 74th Constitutional (Amendment) Act.

The panel further suggested that property tax should be restructured as a general benefit tax and components like water and sewerage services should be charged as separate user charges.