Property tax will increase by 100% to 150% for only 7% of assessees in urban areas of the State after the revision, said Municipal Administration Minister K.N. Nehru.
Speaking to mediapersons on Tuesday, he said Chennai had 11.03 lakh residential properties, and the increase in property tax would have a minimal impact on low income houses with an area of less than 600 square feet. “Property tax in the Greater Chennai Corporation will increase by 25% for 1.52 lakh houses, 50% for 3.46 lakh houses and 75% for 3.12 lakh houses,” he said.
Similarly, property tax in other urban areas of Tamil Nadu has been lesser than urban areas in other States of the country even after the guideline value has increased in the past few years in the urban areas of the State.
“ Residents of developing areas have started demanding better civic infrastructure. But local bodies have been borrowing funds to implement such projects as their own source of revenue is low. The 15th Finance Commission has urged local bodies to revise property tax and announce floor rates. Urban local bodies will be eligible for grants only if the property tax is rationalised,” Mr. Nehru said.
He said the civic bodies had to augment their own source of revenue in order to implement a number of infrastructure projects.“The AIADMK government increased the tax by 50% and 100%. But this government has increased it only 25% for low income houses of less than 600 sqft,” Mr. Nehru noted.
In 2018, the property tax was increased by 50% for residential property and by 100% non-residential buildings but were stopped because of the elections, the Minister said.
“Now we have been advised to increase the tax by 25% to 50% for 83% of buildings owned by the low income group. Over 77.87 lakh houses will experience a tax increase of only 25%. While 45.54 lakh houses will get a 50% increment, 19.23 lakh houses will get a 100% rise,” said Mr.Nehru.
Pointing to the guideline value of 1 sqft of land in Anna Nagar fixed at ₹1,393 in 1989, Mr. Nehru said the guideline value had increased to ₹6,253 per sqft, and the property tax had to be revised in such urban areas.
Similarly in Teynampet, the guideline value of ₹1,978 per sqft in 1998 has increased by 283%. Earlier, the floor rates for property tax were equal for all buildings, including small houses. Now low income houses will pay less tax, Mr. Nehru said.
For a 600 sqft house of a low income household, ₹810 is the minimum tax, and it will increase to ₹1,215 after the revision. But the same building incurs a tax of ₹2,157 in Mumbai. The maximum property tax for a 600 sqft building in Chennai is ₹3,240, and this will increase to ₹4,860 after the revision. The maximum tax for the same kind of building is ₹8,660 in Bengaluru, ₹15,984 in Kolkata and ₹84,583 in Mumbai, Mr. Nehru added.
The minimum property tax for such a building in the Coimbatore Corporation will increase from ₹204 to ₹255 after the revision.The highest property tax for a 600 sqft residential property in Coimbatore is ₹972; this will increase to ₹1,215 after the revision. But the property tax for a similar building is ₹2,160 in Lucknow and ₹2,520 in Indore.
The rate of increase in property tax was lower during the DMK regime compared to that of the AIADMK regime, Mr. Nehru said. “The property tax revision has been done to increase the own revenue of local bodies. Officials will take action against under assessment of buildings. The revenue has decreased during the pandemic,” he added.
