Thane Civic Body Approves Property Tax Hike of 12% for Homes and 20% for Commercial Properties

By The Realty Times | Real Estate News Services

Thane, Maharashtra: Property owners in Thane are set to face a higher tax burden following the Thane Municipal Corporation’s (TMC) decision to increase property tax rates by 12% for residential properties and 20% for non-residential properties. The proposal was approved at the civic body's general body meeting in August 2026, marking the first property tax revision in eight years.

The decision is expected to generate an additional ₹104.67 crore in annual revenue for the municipal corporation, which is looking to strengthen its finances and meet the growing expenditure requirements of the rapidly expanding city.

Under the approved proposal, residential property owners will face a 12% increase in property tax, while non-residential properties, including commercial establishments, will see a 20% hike.

According to the civic administration, the proposed revision is expected to generate approximately ₹63.07 crore from residential properties and ₹41.60 crore from non-residential properties annually.

The increase comes just months after the civic body presented its 2026–27 budget without a proposed property tax hike, bringing the revised tax structure into focus for homeowners, businesses and property investors.

The Thane Municipal Corporation has cited the need to improve its financial position and meet increasing expenditure on urban infrastructure and civic services as reasons for the tax revision.

The corporation expects to collect approximately ₹768.42 crore in property tax annually under its existing revenue estimates, while its 2026–27 budget has set a target of ₹1,600 crore from property tax. This leaves a substantial gap of ₹831.58 crore between the expected collection and the budget target.

Even with the proposed increase, the additional revenue of ₹104.67 crore is unlikely to bridge the entire shortfall. The civic body is also undertaking a GIS-based survey to identify properties that have not been assessed for tax, as well as properties with changes in usage or additional built-up areas.

Despite the proposed increase, the existing 100% exemption on the general component of property tax for residential properties measuring up to 500 square feet will continue.

The concession benefits approximately 3.97 lakh residential property owners in Thane and costs the municipal corporation around ₹43 crore annually. Ex-servicemen will also continue to receive the applicable exemption on the general component of property tax.

The continuation of these exemptions is expected to provide some relief to eligible small-home owners amid rising household expenses.

The proposed tax increase has drawn criticism from residents and political representatives, with concerns raised over the additional financial burden on property owners.

Opponents have questioned whether higher taxes will be accompanied by visible improvements in civic amenities and have called for better utilisation of existing revenues. The debate also highlights the challenge facing urban local bodies as they seek additional resources to support infrastructure development while managing taxpayers’ expectations.

The property tax revision could have implications for Thane’s residential and commercial real estate markets.

For homeowners, the increase will add to the recurring cost of property ownership. Landlords may also review rental rates to account for higher annual expenses, although the extent to which these costs can be passed on to tenants will depend on local rental demand and market conditions.

Commercial property owners may face a relatively larger increase in operating costs, potentially influencing rental negotiations and investment calculations. For prospective homebuyers and investors, property tax will remain an important factor when assessing the total cost of owning a property in Thane.

However, the tax hike alone does not determine property price movements. Demand, infrastructure development, connectivity, employment growth and overall market conditions will continue to influence the city's real estate outlook.

For Thane’s real estate sector, the revised tax structure adds a new cost consideration for homeowners, landlords, businesses and investors. The long-term impact will depend on how effectively the municipal corporation uses the additional revenue to improve the city’s infrastructure and quality of life.