Threefold hike in property tax on residential units
The UT Administration has notified a threefold increase in property tax on residential properties and two-time hike on commercial ones. All government properties are exempt from the hike. The new tax will be applicable from April 1 for 2025-26.
The Municipal Corporation (MC) had introduced the property tax at the rate of 3% of the annual rateable value on commercial, industrial and institutional land and buildings in 2004. The residential land and buildings were brought within the tax ambit in 2015. The levy had not been revised since it was first introduced.
According to the notification issued by the UT Local Government and Urban Development Department, “For the assessment year 2025-26, the property tax on residential sites and buildings shall be increased by three times the rates already specified by the administration (9% of the annual rateable value). The property tax on commercial and industrial lands and buildings shall be charged at 6% of the annual rateable value.”
The notification further stated that properties that fall in the category of service charges shall continue to be charged at currently applicable 3% of the annual rateable value.
In February this year, the MC wanted to increase the property tax across all categories by four times to enhance its annual revenue by nearly Rs 200 crore. Also, the MC had proposed a 1% annual hike on commercial properties (until reaching the limit of 15%) and 5% annual hike on residential properties.
However, the proposal was rejected by all councillors cutting across party lines, but MC Commissioner Amit Kumar wrote a dissent note, stating that it was the need of the hour to improve MC’s financial conditions. The proposal was sent to the UT Administration, which approved the increase in the tax.
The increase would provide some relief to the MC facing the financial crunch, as it would increase its revenue by nearly Rs 100 crore — Rs 72 crore from commercial properties and Rs 27 crore from residential ones.
Mayor blames Oppn
Mayor Harpreet Kaur Babla said the agenda for increasing the property tax was brought to the MC House and was later rejected by all parties.
The Mayor said she was of the opinion that tax be increased by 1% on residential property and 2% on commercial ones. However, the Opposition rejected this proposal, so the Administration exercised its power under the Punjab Municipal Act to hike the levy. “This increased burden on the residents of Chandigarh is due to the non-cooperation of the Congress and the Aam Aadmi Party and their petty politics,” she added.
