What is outstanding property tax arrears?

Outstanding property tax arrears refer to unpaid property tax from previous financial years that remain due and payable to the municipal authority. These are accumulated dues that carry forward year after year along with applicable interest and penalties, until they are fully settled.

How Arrears Accumulate

• Non-payment or partial payment of property tax in prior years.
• Pending dues from properties that changed ownership without clearing tax.
• Disputes that delayed payment and resulted in unpaid balances.
• Incorrect self-assessment followed by municipality's revised demand.

Consequences of Property Tax Arrears

• Interest/Penalty: Typically 1%–2% per month on the outstanding amount.
• Attachment of Property: Municipal authority can attach (seize) the property.
• Seal/Lock Property: Municipality may seal or lock the premises.
• Bar on Registration: Arrears can block property sale or mortgage registration.
• Legal Action: Civil suits or recovery proceedings under municipal law.

Property tax arrears are a serious legal and financial liability that can block property sales and attract escalating penalties. Clearing arrears early especially during OTS windows is the most cost-effective approach.