Chennai Residents Brace For 6% Property Tax Hike As Corporation Greenlights Proposal

Chennai residents should prepare for higher property taxes, as the Greater Chennai Corporation Council has approved a 6% hike on Friday.

Although several members opposed the hike, the resolution was approved. Apart from the property tax hike, the Greater Chennai Corporation has also raised the penalty for dumping garbage and construction waste in public areas. From Rs 500, it has now been increased to Rs 5,000.

Deputy Mayor Mahesh Kumar stated that the increase is necessary to qualify for Union government grants, though he suggested that alternative solutions may still be considered. The tax hike will affect both residential and commercial properties throughout the city.

The CPM and VCK councillors demanded that the council withdraw the resolution, citing that it will affect the people. However, it advised the corporation can increase the property tax for properties with 2000 square feet.

The development comes after a government directive issued on September 5 to various municipal authorities, including the Chennai Corporation Commissioner and district collectors.

Sources from the Chennai Corporation's revenue department told The Hindu that the civic body faces financial difficulties. The State has not yet released funds for several projects, forcing the Corporation to use its capital funds for initiatives like road development. This situation has prompted the civic body to increase property tax rates.

Speaking to the daily, NG Lokanathan, chairman of the Builders Association, Southern Centre, expressed concern over the frequent tax hikes. He believes this could deter middle-class investments in properties, negatively impacting builders and the real estate sector. The potential increase may further strain an already challenging market environment.

According to Rule 264 (2) of the Tamil Nadu Urban Local Bodies Rules, 2023, annual property value revisions are based on either the average growth rate of the Gross State Domestic Product over five years or a fixed 6%, whichever is higher. The last general revision occurred on April 1, 2022, with significant increases across various property categories.

In 2022, residential property taxes rose by 50% to 150%, depending on building type and location.

In Chennai's core areas, properties measuring 600 to 1,200 square feet saw a 75% tax increase, while those between 1,201 and 1,800 square feet saw a 100% rise. For houses larger than 1,801 square feet, the tax was hiked by 150%.

In the city's added areas and other corporations, homes ranging from 600 to 1,200 square feet faced a 50% increase, those between 1,201 and 1,800 square feet saw a 75% rise, and houses exceeding 1,801 square feet experienced a 100% increase.

Commercial buildings and industries in core Chennai witnessed a 150% tax increase, while educational institutions saw a 100% rise.