Delhi property tax explained: unit area method, colony categories A to H and the rebates

Rules and rates as of 19 October 2026.

If you buy a flat or a builder floor anywhere under the Municipal Corporation of Delhi (MCD), you also take on a yearly property tax bill. Unlike a rent-based system, Delhi's bill does not depend on what your home would fetch as rent. It is worked out from a fixed value per square metre, your colony's category and a few multipliers. Once you know the inputs, you can check a seller's past bills and estimate your own before you sign.

This guide covers MCD areas only. The New Delhi Municipal Council area and the Delhi Cantonment run their own property tax systems.

The law behind the bill

Property tax in MCD areas comes from the Delhi Municipal Corporation Act, 1957. Its arrangement of sections shows how the scheme is built: section 114A is headed "Building tax", section 114B "Rebate for senior citizens, women and physically challenged persons", section 114D "Rate of building tax", and sections 116A to 116G deal with classifying colonies, fixing base unit area values and determining annual value. Section 128 is headed "Notice of transfers", which is the duty to tell the corporation when a property changes hands. (We have written separately about why that record matters on resale.)

This method, called the unit area method, has applied in practice since 1 April 2004, when the report of the first Municipal Valuation Committee took effect. The Delhi High Court summarised it in its judgment of 12 September 2025 in Eros Resorts & Hotel Ltd v. Municipal Corporation of Delhi (W.P.(C) 1394/2011 and connected cases). That case was about hotel tax, but the court set out the general formula, and it is the clearest official statement of it we could read.

The formula in one line

As the High Court put it:

Annual Value = Unit area Value × Covered Area × Multiplicative factors (OF, AF, SF, UF)

Property tax is then the annual value multiplied by the tax rate for your category. The judgment records that section 114D allows the base rate to be set anywhere between 6% and 20% of annual value.

Each input means something specific:

• Unit area value (UAV): a rupee value per square metre of covered space, fixed by colony category.
• Covered area: the built-up space being taxed, in square metres.
• Age factor (AF): older buildings get a lower multiplier.
• Structure factor (SF): pucca, semi-pucca or kutcha.
• Use factor (UF): 1 for residential; higher for shops, offices and hotels.
• Occupancy factor (OF): 1 if you live there, 2 if a residential property is let out.

Categories A to H and the multipliers

Every colony is placed in one of eight categories, A (the costliest) to H (rural villages). The Fifth Municipal Valuation Committee's interim report says this is done on a 100-mark scoring matrix with ten parameters: A for 80 marks and above, down to G for under 30, with H for rural villages. The figures below come from the property tax calculation parameters published on MCD's tax-return portal, which are marked for 2019-20.

Category	UAV (₹ per sq m)	Residential tax rate	UAV proposed by MVC-V (not in force, as far as we found)
A	630	12%	860
B	500	12%	680
C	400	11%	550
D	320	11%	440
E	270	11%	370
F	230	7%	310
G	200	7%	270
H	100	7%	140

The same document sets the age factor at 0.5 for buildings constructed before 31 March 1960, rising by 0.1 a decade (0.6 for the 1960s, 0.7 for the 1970s, 0.8 for the 1980s, 0.9 for the 1990s) to 1.0 for anything built from 1 April 2000. The structure factor is 1 for pucca, 0.7 for semi-pucca and 0.5 for kutcha buildings.

Two cautions. First, the current year's MCD rate schedule (for 2025-26) is published only as a scanned image that we could not read, so check the rates on your own bill or the portal. Second, the Fifth Municipal Valuation Committee recommended raising unit area values by 37% in an interim report released for public comment in 2022. We did not find a notification bringing those values into force. The last column is there so you can see what the change would mean, not because it applies today.

Worked example: a 90 sq m flat in a Category C colony

Illustrative figures. Say you buy a flat with 90 sq m of covered area in a Category C colony, built in 2012 (age factor 1), pucca (structure factor 1), used as a home (use factor 1).

• If you live in it: annual value = ₹400 × 90 × 1 × 1 × 1 × 1 = ₹36,000. Tax at 11% = ₹36,000 × 0.11 = ₹3,960 a year.
• If you let it out: the occupancy factor becomes 2, so annual value = ₹72,000 and tax = ₹7,920. Renting out doubles the bill.
• If the same flat had been built in 1985: age factor 0.8, so annual value = ₹28,800 and tax = ₹3,168.
• If the MVC-V proposal for Category C (₹550) were ever notified at the same 11% rate: ₹550 × 90 × 0.11 = ₹5,445, about 37.5% more.

For comparison, the same 90 sq m in a Category G colony works out to ₹200 × 90 × 0.07 = ₹1,260.

Rebates you may be able to claim

MCD's user manual for filing property tax returns lists four rebates of 30% each: for property owned by women, senior citizens, ex-servicemen and physically challenged persons. It states that these "are applicable up to the area of 100 sq. mtr. only". On the example above, a 30% rebate takes ₹3,960 down to ₹2,772, a saving of ₹1,188.

Two more rebates are listed on MCD's property tax portal:

• Advance payment: 10% if you pay "before 30th June of current FY". On ₹3,960 that is ₹396 off, leaving ₹3,564.
• Online payment: 2% for residential property where the tax is up to ₹10,000.

The deadline has moved in some years. MCD's own FAQ for the 2025-26 amnesty scheme referred to the 10% rebate being available "till 31-07-2025". We found no MCD notice for 2026-27 on the portal, so check the current date before relying on 30 June.

We could not find an official statement of how rebates combine, or the order in which the portal applies them. If the 30% and 10% rebates were applied one after the other, the example bill would be ₹3,960 × 0.70 × 0.90 = ₹2,494.80. Treat that as an upper bound on the saving until you see the portal's own calculation.

Checks to make when you buy

• Ask the seller for the property ID and the last few years' tax receipts, and look up the property on the portal yourself.
• Compare the covered area, colony category and occupancy (self or rented) on the return with the flat you are buying. A wrong category or area means a wrong bill.
• After registration, file the notice of transfer so that the record and future bills are in your name.
• If you qualify for a 30% rebate (for example, a woman owner or a senior citizen), make sure it is claimed in the return from the first year.

For an unusual property, such as a mixed-use floor, a village abadi plot, or a home with past arrears or a pending assessment, talk to a chartered accountant or a lawyer who handles municipal tax before you rely on your own estimate.