Jacked Up Property Tax Bills Take Chennai Residents By Surprise

Barely four months after the Tamil Nadu government gave its approval to urban local bodies, including the Greater Chennai Corporation, for undertaking a general revision of property tax; confusion has arisen among residents over the new tax rate. Many puzzled property owners from various corners of the city have been raising complaints at the revenue department, seeking explanation on the sudden hike in their property tax amounts, some of which comes to a whopping nine times the usual figures.

Tax revision effectuated after court order

In July, the state government took the decision to revise the rates after a directive from the Madras High Court. The proposed revision of property tax was capped at 50 per cent for residential buildings and 100 per cent for rented residential and non-residential or commercial buildings. According to a government order, necessary guidelines for the general revision were issued by the commissioner of municipal administration, commissioner of the Greater Chennai Corporation and director of town panchayats separately.

The Greater Chennai Corporation had asked all the residents to submit a self-declaration of the built-up area of their properties and also extended the final date for submission to September 16. With this revision, the authority had estimated a revenue collection of around Rs 300 crore. Currently, the civic body collects revenue to the tune of Rs 720 crore which could shoot up to Rs 1, 200 crore after the revised amount is collected.

However, residents are disappointed as they fail to see any transparency in the process or any grievance redressal mechanism to voice their concerns over the unfair hike. Some say that no explanation was provided by the corporation. What irks them more is the added burden of increased water tax - which is calculated as 7 per cent of the total property tax.

 Corporation gives clarification

The corporation officials have justified the hike stating that several properties in the newly added areas of Chennai were subjected to reassessment as they were under-assessed. The built-up area of the newly constructed buildings had also been increased. In October 2011, the city limits was expanded after 42 small local bodies, including nine municipalities, eight town panchayats and 25 village panchayats, were merged with the Chennai Corporation.

Moreover, the officials say that some owners have under-assessed their properties by excluding their parking space and other common areas, that had brought down the total value of the tax to be paid. The errors were rectified by the authorities.

The revised formula for the property tax is:

BSR (Base Street Rate) x Area of the Building x 135.40 (Factor)

The factor is obtained after calculating the depreciation value, maintenance and land value. The base street rate was arrived at keeping the guideline value and annual rental value of the property.