The New Delhi Municipal Council (NDMC) is preparing to introduce a comprehensive property tax assessment system based on the unit area method (UAM) within the next three months. The council has forwarded the bylaws outlining the implementation process to the Union home ministry for notification. These bylaws were formulated following amendments to the NDMC Act 1994, which were notified in May 2026 under the Jan Vishwas (Amendment of Provisions) Bill 2026.
Current Taxation System
Approximately 7% of properties in NDMC areas are still assessed under the older rateable value method, while the remaining properties are already covered under UAM. This has resulted in two parallel taxation systems operating simultaneously.
Key Changes in the New System
Officials stated that the reform is expected to reduce the upper property tax slab from 30% to 20%, enabling broader rationalisation of the taxation structure. Tax rates are anticipated to range between 10% and 20% of the annual value of properties.
Once the bylaws are notified, a Municipal Valuation Committee (MVC) will be constituted to recommend parameters for calculating property tax. Since most NDMC areas enjoy upscale civic infrastructure, various factors may be considered while determining tax liabilities.
Public Participation and Grievance Redressal
After the valuation formula is finalised, objections and suggestions will be invited from the public. A hardship and anomaly committee will also be formed to address grievances related to property tax assessments and the new methodology.
Property owners who have not paid taxes can take advantage of the new system once it is implemented, likely by the end of the year, according to an official.
Residents and Traders Express Skepticism
However, residents and traders remain sceptical about the timeline. A trader noted that the MVC itself takes months to finalise the formula, and thereafter, public objections and grievances will have to be addressed.
Background of the Reform
Officials explained that earlier attempts to fully introduce UAM were unsuccessful because the NDMC Act mandated assessment based on annual rental value, necessitating amendments to the parent legislation.
The reform will reduce disputes, improve transparency, and bring greater predictability to tax liabilities. It will also eliminate what is described as the pre-Independence-era 'property tax inspector raj', said an official.
Revenue Collection and Targets
NDMC collected Rs 1,396.8 crore in property tax during 2025-26, registering a growth of 34.2% over the previous financial year. For 2026-27, the council has set a target of Rs 1,290 crore as it plans to switch fully to the standardised UAM system.
