A number of factors affect the total amount of property tax that must be paid. The use factor in property tax is one such component that often confuses property owners. I discovered that it simply refers to how the property is being used. Tax differences between residential and non-residential properties are caused by the use factor.
What is Use Factor in Property Tax?
Based on the purpose of the property, the use factor in property tax computation establishes the applicable tax rate.
Residential properties often have a lower usage factor, but non-residential or commercial properties are valued higher because of their ability to generate income.
Shops, offices, hotels, and industrial premises, for instance, are classified as non-residential and are therefore subject to a higher tax duty than residential homes or apartments.
By using the use factor, local governments make sure that taxes are collected fairly, with businesses making larger contributions to public infrastructure than private residences.
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Hey,
I pay property tax for my residential bungalow in a posh area of North Delhi. In the receipt, I noticed several types of charges were incurred. I asked my husband for details about the use factor in property tax and how it impacts our total tax amount. I will share the details below.
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In Delhi, the Municipal Corporation of Delhi calculates property tax based on the following factors.
Unit area
Age factor
Use factor
Structure factor
Occupancy factor etc.
As the name suggests ‘ the use of the property decides the amount of tax needed to be paid. It is a factor that takes into account the usage of the property and demarcates lower tax for residential use properties. Non-residential use properties are demarcated with higher taxes.
If the property is more in use, the property owner needs to pay higher taxes. Take a look at the table below to know the use factor 2 in property tax.
Property type |
Use factor |
Residential property |
1 |
Non-residential public purpose |
1 |
Non-residential public utility |
2 |
Industry, entertainment and clubs |
3 |
Restaurants, hotels up to 2-star rating |
4 |
3-star and above hotels, towers, hoarding |
10 |
This is all the information I have on use factor in property tax
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Poonam
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3 Year
2022-10-28T13:18:00+00:00 2022-10-28T13:18:07+00:00Comment
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