Maharashtra Exempts Small Homes In Mumbai From Education And Tree Cess
Relief For Residents As Properties Up To 500 Sq. Ft. Freed From Extra Tax Burden
In a major relief for Mumbai residents, the Maharashtra Government has amended three key legislations to exempt small residential tenements from paying education cess and tree cess, effective January 1, 2022.
The amendments, introduced through an ordinance by Governor Bhagat Singh Koshyari, cover the Maharashtra Education and Employment Guarantee (Cess) Act, 1962, and the Maharashtra (Urban Areas) Protection and Preservation of Trees Act, 1975. The changes mean that residential buildings or tenements with a carpet area of 46.45 sq. meters (500 sq. feet) or less in Mumbai will no longer be subject to these additional levies.
Why The Change Was Needed
Under Section 140 of the Mumbai Municipal Corporation Act (1888), property tax includes multiple components such as water tax, sewerage tax, general tax, education cess, and tree cess. Rising inflation, combined with the economic impact of Covid-19, had made property taxes increasingly unaffordable for low-income families.
The government noted that many residents from slum areas have been shifted into permanent housing under state and municipal schemes. With most of these homes falling under the 500 sq. ft. threshold, civic activists and residents had consistently demanded relief from rising property taxes.
Responding to public pressure, the Brihanmumbai Municipal Corporation (BMC) also passed a resolution urging the state government to exempt these households.
Key Amendments
- New Section 7A was inserted into the Maharashtra Education and Employment Guarantee (Cess) Act, 1962, exempting small homes from education cess.
- Amendment to Section 18 of the Maharashtra Urban Trees Protection Act, 1975 prevents levy of tree cess on these properties.
- Together, the amendments ensure that residents of homes up to 500 sq. ft. will not pay any component of property tax related to these two cesses.
Broader Impact
This move is expected to benefit lakhs of middle and lower-income families in Mumbai, particularly those living in redeveloped slum housing. For families struggling due to job losses and business closures during the pandemic, this decision provides much-needed financial relief.
The ordinance also signals the government’s intent to make housing more affordable in Mumbai, where property taxes have been a long-standing burden for small homeowners.
