Cut in property tax to cost MC Rs 25 cr annually

The cash-strapped Municipal Corporation (MC) will suffer about Rs 25-core loss annually due to the partial rollback in the property tax hike.

Facing strong criticism from all political parties, including the BJP, and various associations of the city, the UT Administration had reduced the property tax for the assessment year 2025-26 — from three times to two times on residential property and from 6 per cent of the annual rateable value to 5 per cent on commercial, industrial and institutional lands, and buildings.

Amit Kumar, MC Commissioner, confirmed that the civic body would suffer loss of about Rs 25 crore on account of the reduction in the property tax hike. He said the tax was a regular source of income and it was necessary to increase the rates on a regular basis.

He said the MC was facing the financial problem as it had over Rs 80-crore fixed liability every month. There is a big gap between the income and the expenditure, which is increasing day by day.

When the agenda for increasing the property tax was tabled in the MC General House on February 17, it was rejected amid strong protests by councillors. However, the Commissioner put up his dissent note on the resolution rejecting the agenda.

The city has over 1,42 lakh registered properties. The MC receives about Rs 60 crore annually in property tax. With the three-fold increase in the tax, the MC was expecting the revenue from the levy touching the Rs 200-crore mark.

In 2004, the Municipal Corporation introduced the property tax at the rate of 3% of the annual rateable value on commercial, industrial and institutional lands and buildings.

The residential land and buildings were brought within the tax ambit in 2015.

The tax had not been revised for many years, which left the Administration with no option but to increase the rates on its own.

However, the three-fold hike evoked strong opposition by traders, residents welfare associations and industrialists. Even the BJP councillors threatened to resign over the issue.