Corporation devises formula to calculate property tax on basic street rate

Since the day the revision of property tax was announced, there was just one question — how much will the resident have to pay? The corporation has finally devised a formula to calculate the tax based on the basic street rate and the guideline value.

The formula notified in the government gazette on Thursday has taken into consideration cost of construction and value of property. Also, the taxes that were-area wise earlier, will now on be based on streets. Every street will have its own rate based on the guideline value and monthly rental value.






The corporation has decided that the core areas will have up to 50% hike whereas the added areas 10% hike.

Earlier, the extended areas such as Ambattur, Alandur, Sholinganallur had their own formula to calculate property tax. Now, the civic body has arrived at a common method of calculation. A senior corporation official said, “We have now ensured that the methodology for the entire corporation limit is same. We have recalculated base street rate in such a way that whatever tax the residents of the added area pay will remain the same or not increase more than 10%. But the calculation of that tax will be as per the Greater Chennai corporation method,” said the revenue officer.

The extended areas which were under municipalities and town panchayats had earlier increased their basic street rates to 3% or 4% to take loans from the World Bank and other agencies. But their taxes were still lesser. But, when these areas were merged with the civic body, their property taxes shot through the roof as BSR is a major component in the tax calculation.

The corporation has collected guideline values of all the areas from the government and calculated the annual rent value of the properties.

But a behind-the-envelope calculation shows that this will not reduce the disparity. Some areas in Alandur and Ambattur have a base street rate between 1.25 and 4 which is much higher than core areas. Yet, they will see a hike of 10%. And core areas with just 0.25 to 1.5 will see just 50% hike.

“Keeping the government order in mind, the hike for residential properties cannot be more than 50%, so, we have no other choice,” said an official.

Residents in added areas said even if it was just 10%, they were extremely unhappy about the hike. A resident of Puzhuthivakkam said his tax had gone up steeply from Rs 350 to Rs 3,000 after it was merged with corporation. “We do not get piped water. We do not have storm water drains. We lack in underground drainage facilities. Yet, we must pay such high taxes,” he rued. Residents of Madhavaram and Ambattur also voiced similar opinions.

However, some were happy and said they did not mind the hike. “We are happy that we have been merged with the civic body as the roads in the area were developed. Also, the grievance redressal is much better in comparison to the municipality,” Sam Ponraj of Kottivakkam said.

Residents of the core city areas said the hike will not affect them much. “At Thiruvanmiyur, we pay just Rs 511 and this increase is very meagre keeping the land value and guideline value increase since 1998,” said Senthil Arumugham, a resident.