50 per cent property tax hike for own houses, 100 per cent rise for property on rent

A government order issued by the Municipal Administration and Water Supply Department has directed the general revision of property tax in all urban local bodies. Though it is likely to be unpopular among the public, the move has come after the court directed the Municipal Administration secretary to take a decision on the proposal for property tax revision submitted by the Corporation Commissioner and report during the subsequent hearing on August 3.

Increasing the tax rate would shore up the revenue for the local bodies, which are now struggling to run day-to-day operations due to a crippling shortage of funds.

For instance, in the case of the Greater Chennai Corporation, which is heavily debt-ridden, the revision comes after 20 years. A senior Corporation official said the revision of property tax has been pending for long and would immensely benefit the civic body to repay its debts within the next few years.

“The Corporation’s current loan stands at Rs 2,500 crore plus an additional Rs 450 crore in overdraft and Rs 110 crore for monthly expenditure. With the revision, the Corporation can stabilise within the next 3–4 years,” said the official, adding that the modalities were being worked out. After the hike, Corporation sources estimate the collection to go up by an additional Rs 200 crore annually.

The Corporation’s non-revision of property tax had severely hit its revenue, according to an audit report on funds to local bodies. The report cited that like the revision of profession tax every five years with a 25-35 per cent enhancement, a similar stipulation should be put in place for revision of property tax.