Cap Rate Calculator India

The calculator's two expense methods, and where each one breaks

This calculator offers two ways to reach NOI: the 50% rule, which estimates all operating expenses (including vacancy) as half of gross rent, or manual mode, where you subtract a vacancy percentage and then enter your own annual operating expenses. The 50% rule is a fast screen that assumes an Indian property behaves like the US rental stock the rule was popularized for — a maintenance society charge, municipal tax and insurance profile that isn't necessarily a fair match for, say, a new-build Bengaluru apartment with a low society charge and a light property-tax bill. Manual mode is the more honest input for an Indian property, and one line inside it is municipal property tax, which none of the three tax-appraisal systems below charge as a flat percentage.

Bengaluru: BBMP's Unit Area Value system

BBMP computes property tax under the Unit Area Value (UAV) Self-Assessment Scheme, not a flat percentage of market value. Its own FAQ confirms that "depreciation is provided under UAV", calculated on a calendar-year basis and claimable once per block period — an older building carries a lower assessed value than an identical new one on the same UAV zone rate. The same FAQ confirms a 5% discount for paying at the prescribed rate ahead of the due date, and 2% per month penal interest on tax belated from before 2016-17, and that car-park area billed separately from built-up area is charged at 50% of the zone/occupancy rate rather than the full residential rate. This registry could not confirm BBMP's zone-wise per-square-foot UAV rate table or the specific tax-plus-cess percentage figures widely repeated by aggregator sites — do not treat those as BBMP-confirmed; enter the actual amount from your own BBMP tax notice into this calculator's manual opex field instead of an estimated percentage.

Mumbai: MCGM's capital value formula

MCGM taxes on Capital Value (CV), not annual rental value. Its own RTI manual gives the formula as CV = Base Value (from the Stamp Duty Ready Reckoner) × User Category weightage × Nature/Type of Building weightage × Age Factor weightage × Floor Factor weightage × Carpet Area, with open land valued instead as Base Value × User Category × permissible FSI × Area. The same manual states that an exclusive-possession open terrace is valued at 20% of the flat's rate for a residential unit (50% for non-residential), a mezzanine floor at 70%, and a loft or attic floor at 50% of the base rate below it — all of which matter if the property you're entering into this calculator has a terrace or mezzanine counted separately. This manual sets out the formula's structure and inputs, not the final percentage rate MCGM applies to the computed CV — do not infer a Mumbai tax rate from it; pull the rate from your own MCGM assessment.

Chennai: GCC's Reasonable Letting Value system

Chennai taxes under a third method again. The Greater Chennai Corporation's own portal states property tax is based on Reasonable Letting Value (R.L.V.) under Section 100 of the Chennai City Municipal Corporation Act, 1919: annual rental value equals monthly rental value (from plinth area × a location-wise basic rate per square foot) × 10.92, the common annualisation factor built from 10% depreciation and 10% addition for land value, with half-yearly tax charged as a percentage of that annual rental value per prescribed brackets (special property types such as nursing homes and star hotels use a different income-based formula entirely). The bracket table itself — which RLV band maps to which tax percentage — was not available from this fetch; do not assume a specific Chennai rate without checking the current bracket on GCC's own portal.

Why the purchase price you enter may need a GST adjustment first

Cap rate divides NOI by the property value you enter as purchase price. If you bought under construction rather than ready-to-move, GST is part of what you actually paid to acquire the asset, and leaving it out understates your true denominator. CBIC's own rate notification confirms that construction of an affordable residential apartment is taxed at an effective 1% (paid in cash only, no input tax credit), and a non-affordable residential apartment at an effective 5%, also without ITC. Affordable housing is defined by carpet area and price together: up to 90 square metres in a non-metropolitan city or town, up to 60 square metres in a metropolitan city, and value up to ₹45 lakh (metros listed are Bengaluru, Chennai, the Delhi NCR towns, Hyderabad, Kolkata, and the whole Mumbai Metropolitan Region).

GST stops applying once the sale happens after the property is finished. The CGST Act's Schedule III lists "sale of land and...sale of building" as outside the scope of supply altogether, and Schedule II fixes the exact trigger: construction is taxable "except where the entire consideration has been received after issuance of completion certificate...or after its first occupation, whichever is earlier". A ready-to-move flat bought after the completion certificate is issued carries no GST on the purchase price at all — the two prices are not directly comparable in this calculator without accounting for that difference.

What this number will never tell you

Cap rate excludes your mortgage by design — that's what makes it comparable across an all-cash buyer and a financed one — and it excludes income tax entirely. It also has no official Indian benchmark to compare against: no series from RBI, the National Housing Bank's RESIDEX index, CREDAI or the Ministry of Statistics publishes a residential cap rate or rental yield by city. A percentage you see quoted for "average Mumbai cap rate" or similar on a consumer site is not an official statistic — this calculator's output is only as reliable as the rent and price (GST-adjusted, where relevant) you enter yourself.