CURE Bill changes formula, proposes steep property tax hike
The tax collected in the western part of the city will increase by several degrees due to the high property values there. | Photo credit: Representative photo
The Telangana government’s proposed Core Urban Region (Integrated Governance) Bill, 2026 is designed to deal a double whammy to homeowners in the city, which is already grappling with market uncertainty caused by the Middle East war, job losses due to AI and a general downward trend in the economy.
Instead of the existing formula for calculating property tax on the gross annual rental value, which provides for a building’s age-related depreciation, the CURE bill proposes to slap the tax as a percentage calculated on the property’s capital value, which is the market value enforced through the Department of Registration and Stamps.
The resulting burden will be enormous when coupled with frequent revisions to this value, driven not by market conditions but by the desperation of cash-strapped governments. Over the past five years, the department has revised the market values of properties three times, resulting in increases of between 400% and 800%. All these revisions have been driven solely by forcing the revenue of indebted governments that have gone overboard with the cash mines, rather than any other realistic increase in property prices. The CURE bill proposes a minimum of 0.1% and a maximum of 0.5% tax on the capital value of residential property and a minimum of 0.2% and a maximum of 2% on the capital value of commercial property.
Until the corporation fixes the revised property tax, the rate will be treated as 0.15% of the capital value for residential buildings and 0.75% for commercial buildings, the bill says. The lowest property tax thus levied on a 1,200 sft two-bedroom house would be close to ₹ 5,000 under this method.
The Greater Hyderabad Municipal Corporation has not revised its property tax rates for over two decades. However, about five years ago, there was an adjustment to the formula for calculating the annual rental value and the elimination of depreciation for older properties, which phenomenally increased the tax liability of property owners. After the CURE Act is enacted, the burden will increase for all owners, although not uniformly.
The tax collected in the western part of the city will increase by several degrees due to the high property values there. For example, when calculated at 0.15%, the tax liability for a 1,500 sft flat in Serilingampally area would increase from around ₹6,000 to nearly ₹15,000 per annum. The only relief is a gradual increase of a maximum of 20% per year until it reaches the increased value.
Public policy experts also question local differences in the tax burden, with fund spending not based on location. “They are not spending the amount collected from the locality for the development of the same locality. This will lead to many lawsuits,” says activist and writer Donthi Narasimha Reddy, noting that the municipal flat rates also include common areas, which unnecessarily increase the burden.
Published – 23 Jul 2026 20:58 IST