The Chennai Corporation is planning to link property tax with the current guideline values, instead of old base rates finalised in 1998. This is likely to increase the property tax rates across the city.
Following complaints from residents pertaining to anomalies and inconsistencies in the base rates, the civic body is planning to request the State government to amend the Chennai City Municipal Corporation Act to revise the property tax every year based on current guideline values.
The civic body continues to calculate property tax, based on the annual rental value of a property and on base rates fixed 16 years ago.
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With the Chennai Corporation considering a proposal to revise property tax rates on the basis of current guideline values, residents wonder what the impact on their expenses will be.
Some neighbourhoods in the recently-added areas of the Chennai Corporation pay the same property tax as those in well-developed areas such as T. Nagar that fetch high rental values, experts said, pointing to anomalies.
Residents of such neighbourhoods with low guideline value pay the same amount of property tax as neighbourhoods with high guideline values every half year.
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A chunk of the 11 lakh residential and commercial properties which have relatively lower property tax rates are within the old city limits. The civic body will map all such roads to asses the loss of revenue because of the existing system. Based on a study, the civic body will rationalise and revise property tax rates.
Property tax is around 30 per cent of the total revenue of the civic body. The increase in property tax collection is likely to result in a rise in per capita capital expenditure. Chennai spends less than Rs. 2000 per resident, much lower compared to developed cities.