CHENNAI: The city corporation has passed a resolution to increase property tax rates by 6% on an annual basis as per the Tamil Nadu Urban Local Bodies Rules, 2023. The resolution was approved during the council meeting on Friday, despite facing flak from councillors of various parties. Councillors of VCK, CPM and AIADMK staged a walkout in protest.
According to the TNULB rule 264 (2), the annual value of land, buildings, storage structures or telecommunication towers shall be annually increased by the simple average growth rate of the Gross State Domestic Product for the preceding five years or by 6%, whichever is higher, except for the years in which general revision is carried out.
Accordingly, the Greater Chennai Corporation (GCC) has implemented this annual revision of property tax, which is likely to come into force in the next financial year. Deputy Mayor M Mahesh Kumar defended the move, saying that such an annual revision has been mandated by the Union government as a condition for releasing grants.
However, many councillors argued that this will disproportionately impact poor residents with small houses spanning 200-300 sq.ft. They pointed out that many of these people, mostly daily wage earners, are already struggling financially and will now be forced to pay high taxes. They recalled that while the previous tax hike in 2022 was also attributed to the central government’s order, it was a one-time increase.
CPI councillor M Renuka said, “Instead of implementing a 6% hike every year, the corporation could have set a fixed period, such as applying the 6% increase once in every five years, or they could have adjusted the tax rate based on property size classifications. Proceeding without any such consideration is unfair.”
AIADMK councillor K Karthik said, “Property tax is not the only source of revenue for the corporation. While it’s true that the tax wasn’t increased for a long period before 2022, they cannot impose such a significant hike all at once now.”