A Comprehensive Guide to Paying Property Tax in Chennai

Realty investment in any other part of the world begins months ahead of the actual purchase. If you are a first-time homebuyer, it starts with understanding the basics of real estate investing.

A clear understanding of the buying process and what to keep in mind while buying a property equips a homebuyer for further research. Then, the buyer can start researching about finding the property prices in an area to signing the deal. Even after a purchase, as a homeowner, you must maintain the property. And as a dutiful citizen, you must pay your taxes to the government of India. This annually recurring tax is called property tax.

What is Property Tax?

Property tax is the tax paid for ownership of a property in India. Anyone owning a residential or commercial property in Chennai is obliged to pay property tax to the Greater Chennai Corporation (GCC). The GCC is the governing authority who collects the tax, which is later used to fund municipal and civic services.

It is important to pay property taxes because it is a proof of ownership when there is a dispute over the property. The property tax receipt is also one of the important documents when availing a loan.

Factors that Affect Property Tax

Property tax of a building is calculated based on the following factors:

  1. Total plinth area of the building: Entire built-up area including walls and common areas
  2. Basic rate: Predetermined rate based on the street where the building is located
  3. Occupancy Type: Whether the owner lives in the property or rents it out
  4. Usage type: Whether the property is used commercially, residentially, or both
  5. Age: Duration from the construction of the building

Calculating Property Tax

According to section 100 of Chennai City Municipal Corporation Act 1919, property tax is calculated based on the concept of Reasonable Letting Value (RLV).

Monthly RLV = Plinth area*Basic rate per sq. ft.

Annual Value = Monthly rental value * 10.92

In this formula, the basic rate per square feet varies between residential and non-residential properties and according to the location. 10.92 is the common factor used to calculate the annual value of all buildings. Methods of finding the annual value of land, vacant land, super structures, and special buildings (nursing homes and hospitals, hotels and lodging, cinema theatre and marriage halls) differ from this method.

You can also use GCC website’s online calculator to calculate your property tax. Type details of the area and usage like zone number, ward number, street name, floor details and ownership type and calculate demand. Once computed, a detailed calculation is listed down in the page. In the website, there is a “generic tax calculator” where the taxpayer can enter the area and usage check the previous and current tax for a property at any street. There is also an option to verify your tax by entering your mobile number associated with the property tax ID.

Procedure for Assessment of Property Tax

The following are the steps to be followed to assess the property tax:

  1. Sign up with user name and mobile ID in Chennai corporation’s website.
  2. Fill the details of the property through the online application form.
  3. Submit registered documents, copies of registered documents at any of the Tamilnadu Arasu Cable TV Corporation Limited (TACTV) counters, concerned zonal offices, or headquarters.
  4. Submit a copy of the property tax paid receipt in case a building is constructed after demolishing a building.
  5. Submit a copy of vacant land tax paid receipt in case the land was assessed for vacant land tax.

The submitted application will be scrutinized by the assessor, and a proposal with the measurements of the newly constructed building will be submitted to the concerned officer. Upon verification by the approval officer, the proposal will be submitted to the assessment committee. Once the committee verifies the assessments and approves, applicants will be notified through SMS. Citizens can also apply for modification or transfer of the property tax submitting the relevant documents.

How to Pay?

Property tax can be paid by cheque or demand draft through the following ways:

  1. On the official GCC website by using a credit card, debit card or net banking
  2. Through the tax collectors
  3. Walk-in and pay in banks. Some of the banks include IOB, KVB, Canara Bank, YesBank, etc. It is also possible to pay by cash.
  4. Pay at e-Seva centres set up by the State Government.

In case of any discrepancies, the taxpayers can reach out to the revenue officer. It is also possible to verify the status of your property tax on the GCC website. All the appeals and objections can be submitted to the Deputy Commissioner (R&F) or Regional Deputy Commissioners.

Deadline for Tax Payment

Property tax must be paid two times a year. The deadlines for paying property tax are 31st March and 31st September. In case of a default in payment, the GCC levies 1% penalty on the unpaid amount every month.

With transparent and handy tax calculators, the greater Chennai corporation has made it easier for the residents of Chennai to assess and pay their property tax. The system is one of the most user-friendly in the country.

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