Chennai increases property tax after 20 years, residents ask - why now?
Following a Madras High Court directive, the Tamil Nadu government has given its nod to the Greater Chennai Corporation, 11 other municipal corporations, 124 municipalities and 528 town panchayats, to revise property tax rates in the state. The new rates will be effective from April-September 2018.
While the increase in property tax will not be more than 100 per cent for commercial and not more than 50 per cent for residential and rented-residential buildings, residents are unhappy over this sudden hike.
Chennai saw the last property tax hike in 1988, and the rest of the state in 2008. Analysts and tax advisers believe that probably an annual rise in property tax rates would have been more acceptable.
"If the price of milk and other commodities increase, naturally tax rates too will increase. It is inflation," said V Nagappan, a tax adviser based in Chennai.
"The corporation needs revenue. But why burden the people. A three-five per cent raise every year would be fine, but this is too much," said Sumanth C Raman.
In the last financial year, the Chennai corporation earned Rs 720 crore in property tax. Assessees who have already paid their property tax will have to pay the difference. They will have to file property tax returns, mentioning the usage to buildings and their extent. However, the objection is over the steep rise besides the fact that they don't know how much is being paid for what.
Even though the Greater Chennai Corporation website has a property tax calculator, there are no links to any details on property tax per square foot, or what are the rates in different areas. Moreover, many taxpayers are confused on why property in Chennai is cheaper than their native villages.
"I pay more money for my property in Karaikudi than my house in Chennai. What is the logic behind it? Shopkeepers in Chennai earn more than those in Karaikudi and the rent too is more expensive in Chennai," said V Nagappan.
A few more questions have been raised by the people. Where exactly is their money going?
Is it going towards maintenance, revenue or better administration? The DMK and the BJP, however, have been up in arms against the state government over this. The AIADMk government, on the other hand, has been lamenting that it is yet to receive financial assistance of around Rs 3,500 crore from the Centre as local body elections haven't been held in the state yet.
"The corporations and local bodies have not seen elections in two-and-a-half years. If there were elections they would have gotten money. To cover up for their deficiencies and maladministration, the state is taking money from the people. And people can't ask questions," said Manusundaram of the DMK.
Also read: Income tax returns: Why salaried taxpayers are losing their sleep