On September 27, the Greater Chennai Corporation (GCC) council approved a 6% property tax increase, backed by the Dravida Munnetra Kazhagam (DMK) but opposed by the CPI, CPI(M), VCK, and AIADMK. Dissenting members criticised the tax hike for burdening working-class residents, staging a walkout during the council meeting. The increase, applied uniformly to all property categories, follows a three-year gap since the last adjustment in 2022. The GCC also introduced a 1% penalty for late payments and a 5% incentive for early payments to encourage timely compliance. The hike is expected to take effect in the October-March tax cycle.
On Friday, September 27, the Greater Chennai Corporation (GCC) council voted in favor of a resolution to raise the city's property tax by 6%. This decision received substantial backing from members of the Dravida Munnetra Kazhagam (DMK), but it was met with strong opposition from representatives of the Communist Party of India (CPI), Communist Party of India (Marxist) [CPI(M)], Viduthalai Chiruthaigal Katchi (VCK), and All India Anna Dravida Munnetra Kazhagam (AIADMK). The dissenting members condemned the tax hike, arguing that it would place an undue burden on the working class and economically disadvantaged residents of Chennai, leading them to stage a walkout during the council meeting.
The implementation date for the property tax increase will be officially announced by the state government; however, it is anticipated that the increase will coincide with the upcoming October-March payment cycle. Chennai collects property tax in two half-yearly cycles: the first runs from April to September, and the second from October to March. This structure allows for periodic assessment and collection of property taxes.
When determining the amount of property tax owed, several factors are considered, including the location and type of property, whether residential or commercial. The increase is in accordance with the Tamil Nadu Urban Local Body rule 264(2), which mandates that a uniform 6% increase be applied to all property categories. This regulation also stipulates that the value of land, buildings, and other assets must be increased annually by 6% or in line with the average growth rate of the Gross State Domestic Product (GSDP) over the preceding five years, whichever is higher. This means that property owners can expect their tax assessments to reflect both inflationary trends and economic growth.
This tax increase follows a three-year period without an adjustment, as the last rise occurred in 2022. It reflects the GCC's strategy to maintain revenue in a growing city while addressing community needs.
In addition to the tax hike, the GCC has implemented a new reward and penalty system in 2023 designed to encourage timely tax payments. A penalty interest charge of 1% will be applied to those who do not pay their half-yearly property taxes, accruing until the outstanding balance is settled. This measure is intended to encourage prompt payment and reduce delays in tax submissions.
To further promote compliance, the GCC has instituted a 5% incentive for taxpayers who make their payments within the first thirty days of each half-yearly payment cycle. For the first cycle, this period runs from April 1 to April 30, and for the second cycle, it is from October 1 to October 30. This dual approach of penalties for late payments and incentives for early payments reflects the GCC's efforts to balance fiscal responsibility with support for residents, particularly in light of the recent tax increase.
Overall, while the increase in property tax has sparked debate within the council and among the public, the GCC's strategies aim to ensure that the city can sustain its development and services while also striving to alleviate the financial burden on its residents.
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