Chandigarh administrator VP Singh Badnore clears file for final notification in property tax hike

With UT administrator VP Singh Badnore clearing the file for final notification of property tax hike in Chandigarh from April 1, the path has been cleared for the municipal corporation to collect tax according to new rates from the next fiscal year.

Confirming the development, MC commissioner KK Yadav said that with Badnore’s approval on Monday, the final notification for the property tax hike is expected within the next two days. “We will implement the new rates from April 1,” said Yadav

The hike amounts to about 20% of the existing rates, as cleared by MC General House last December. This will increase MC’s internal income by up to ₹10 crore per annum given that its current collection is close to ₹50 crore per year. The move will affect 30,000 commercial and institutional assesses while 1 lakh residential property holders will have to pay new rates from the next fiscal session.

While it is the first revision in property taxes in the residential category since it was first introduced in 2015, the commercial property tax rate was last revised in 2018.

However, the Chandigarh Vyopar Mandal is unhappy with the move. Chairman Charanjiv Singh said it was only two years ago that property tax was revised for commercial buildings. Rates should not have been hiked so soon, he said.

New notification with more changes
Currently, the rates of property tax (residential) is ₹1 per square feet for the covered area for all floors and ₹2 per square yard for the remaining vacant plot area.

However, as per draft notification issued on February 28, the new rates of property tax is fixed at ₹1.25 per square feet for the total covered area for all floors and ₹2.5 per square yard for the entire plot, rather than the ‘remaining’ vacant plot area considered in the existing system. This anomaly will be corrected in the final notification, an official said.