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Method of Property Tax

Method Of Property Tax Assessment

Under section 100 of Chennai City Municipal Corporation Act 1919, the concept of reasonable letting value (R.L.V.) is being adopted for arriving at the annual rental value and the Half yearly tax for the properties within the limits of Chennai City.
To calculate the half yearly tax for a particular property, the annual value of that property is to be evaluated and to arrive at the annual value, the monthly rental value is to be arrived at. In order to fix the monthly rental value, the plinth area of the property and basic rate of that particular street is necessary.
Prior to 1993-94 (General Revision of Property tax), the assessing authorities had total discretion in fixing the rental value in the absence of basic rates for arriving at the property tax . There was no transparency in the assessment of the properties in the city.
In Corporation of Chennai, the Residential properties are classified into 172 locations and the Non-Residential properties are classified into 274 locations.Thus, separate Basic Rates have been fixed for Residential and Non-Residential localities.
A survey was conducted during 1992-93 and based on the survey, the basic rental values per sq. ft. have been arrived at for the different locations identified in Chennai City.
Based on this the Basic rates were arrived at In respect of Residential Properties, the Basic Rate ranges from minimum of Rs.0.60 to maximum of Rs.2.40 per Sq.ft and for Non-Residential Properties, it ranges from minimum of Rs.4.00 to maximum of Rs.12.00 per Sq.ft.
The basic rates have been furnished ward wise / street wise for both residential and non-residential properties separately so that the property owners can easily locate the basic rates for the properties concerned. Pl. see Property Tax Calculator.
In the case of a particular building having both residential and non-residential portions, the basics rates applicable to residential and non-residential properties of that street will apply for the plinth area of residential portion and non-residential portion respectively.


The assessment of property tax is based on the following factors with reference to any property.

  • Plinth Area
  • Basic rate of the particular street
  • Usage of the Building (Residential or non-residential)
  • Nature of occupancy (Owner or Tenant)
  • Age of the Building

The basic rates given are with reference to Tenant Occupation and if it is in Owner's occupation, rebate will be allowed.
Concessions: The following concessions are allowed while calculating the property tax:
1. Owner's Occupation: If the whole or part of any property is under owner's occupation, then, 25% of the monthly rental value will be allowed as rebate for the residential portions and 10% for the non-residential portions.
2. Semi-permanent buildings: 20% rebate is allowed over the monthly rental value for semi permanent buildings, i.e. tiled, asbestos, thatched roofing, etc. except Terraced Roofing of a particular building or portion.)
3. Depreciation: Depreciation is allowed for the age of the building at 1% for each year for the buildings more than 5 years old subject to a maximum rebate of 25%.
The property owners can calculate their property tax based on the given basic rate and can also use the property tax calculator available at Chennai Corporation website http://www.chennaicorporation.gov.in to calculate the Property tax and to verify the correctness of the assessment made by the Corporation of Chennai.
Step 1: The rental value will be calculated by multiplying the plinth area of any particular Building with the Basic rate of the street in which the building is located.
Step 2: To arrive at Annual Value of any building, multiply the Monthly Rental Value with the Common factor of 10.92, (the method of calculation of the annual value in general has been furnished on page No.15).
Step 3: The Annual Value has been classified in four grades. After arriving at the Annual Value, the Half -Yearly Tax will be calculated as per the Table given below:
Half yearly Property Tax for any property is calculated as percentage of annual value as per table given below:

Grade Annual Value Half Year Tax(As % Of A.V)
I Rs.1.00 to 500.00 6.62%
II Rs.501.00 to 1000.00 9.92%
III Rs.1001.00 to 5000.00 11.02%
IV Rs.5001.00 & Above 12.40%

Example: 1 : Residential Properties
If your property lies in Binjala Subramanian Street at T.Nagar, the basic rate for residential property for that street is Rs.1.50 per Sq.ft. as per the Basic rates of Residential properties. Based on this and with reference to the following property details, the Property Tax shall be calculated as follows:

Sl.No Details Of Property
1. Location T.Nagar
2. Basic Rate (For Binjala Subramanian Street) Rs.1.50 per Sq.ft.
3. Plinth Area Ground Floor - 500 Sq.ft First Floor - 500 Sq.ft
4. Nature of Construction Ground Floor - Terraced First Floor - Asbestos
5. Usage of the Building Residential
6. Nature of Occupancy Ground Floor - Owner First Floor - Tenant
7. Age of Building 10 Years
 

Calculation of Property Tax

Ground Floor Monthly Rental Value 500 Sq.ft. x Rs.1.50 per Sq.ft Rs.750.00
  Rebate for Owner Occupation 25% Rs.187.50
  Rental Value after Rebate Rs.562.50
  Depreciation for Age 10% (@ 1% per year for 10 years) Rs.56.25
  Rental Value after rebate Rs.506.25
  Rental Value for Ground Floor Rs.506.25
First Floor Rental Value (500 Sq.Ft. x Rs.1.50) per Sq.Ft. Rs.750.00
  Rebate for Asbestos Roof 20% Rs.150.00
  Rental Value after rebate Rs.600.00
  Depreciation for age 10% (@ 1% per year for 10 years) Rs.60.00
  Rental Value for First Floor Rs.540.00
  Rental Value Ground Floor Rs.506.25
  Total Rental Value (506.25+540.00) Rs.1045.25 (or) 1045
  Annual Value (Rs.1045x10.92) Rs.11411.00
  Half Yearly Tax (Rs.11411 x 12.40%) Rs.1415.00

Example :2: Non Residential Property
Based on this the Basic rates were arrived at In respect of Residential Properties, the Basic Rate ranges from minimum of Rs.0.60 to maximum of Rs.2.40 per Sq.ft and for Non-Residential Properties, it ranges from minimum of Rs.4.00 to maximum of Rs.12.00 per Sq.ft.

Sl.No. Details Of Property
1. Location Anna Nagar
2. Basic Rate (A.G. BlocK) Rs.8.00 per Sq.ft.
3. Plinth Area Ground Floor - 2000 Sq.ft First Floor - 2000 Sq.ft
4. Nature of Construction Ground Floor - Terraced First Floor - Terraced
5. Usage of the Building Ground Floor - Non-Residential First Floor - Non-Residential
6. Nature of Occupancy Ground Floor - Tenant First Floor - Owner
7. Age of Building Ground Floor - 30 Years First Floor - 20 Years

Ground Floor Monthly Rental Value 2000 Sq.ft. x Rs.8.00 per Sq.ft Rs.16000.00
  Depreciation for Age 25% (@ 1% per year for 25years maximum) Rs.4000.00
  Rental Value for Ground Floor Rs.12000.00
First Floor Rental Value (2000 Sq.Ft. x Rs.8.00) per Sq.Ft. Rs.16000.00
  Rebate for Owner Occupation 10% Rs.1600.00
  Rental Value after rebate Rs.14400.00
  Depreciation for Age 20% (@ 1% per year for 20years) Rs.2880.00
  Rental Value after rebate Rs.11520.00
  Rental Value for Ground Floor Rs.12000.00
  Rental Value for First Floor Rs.11520.00
  Total Rental Value Rs.23530.00
  Annual Value (Rs.23520x10.92) Rs.256838.00
  Half yearly Tax (Rs.256838 x 12.40%) Rs.31848.00
 

Example:3: Both Residential and Non-Residential Portions in a Building:
If your property consists of both residential and non-residential portions and is located in Jagagir Street in George Town Area, the Basic Rate for residential portion for that street is Rs.1.20 per Sq.ft. and for non-residential portion for that street is Rs.4.40 per sq.ft. per the Basic rate of residential and non-residential properties. Based on this and with reference to the following property details, the Property tax shall be calculated as follows:

Sl.No. Details Of Property
1. Location George Town
2. Basic Rate (Jagagir Street) Rs.1.20 per Sq.ft. (Residential) Rs.4.40 per Sq.ft. (Non-residential)
3. Plinth Area 2000 sq.ft Ground Floor
4. Nature of Construction 1200 sq.ft - Terraced 800 sq.ft - Asbestos
5. Usage of the Building 800 Sq.ft - Residential 1200 - Non-Residential
6. Nature of Occupancy 800 Sq.ft - Owner 1200 - Tenant
7. Age of Building 50 Years
 
Ground Floor (Residential) Monthly Rental Value 800 Sq.ft. x Rs.1.20 per Sq.ft Rs.960.00
  Rebate for Asbestos Roofing 20% Rs.192.00
  Rental Value After Rebate Rs.768.00
  Rebate for Owner Occupation 25% Rs.192.00
  Rental Value after Rebate Rs.576.00
  Depreciation for Age 25% (@ 1% per year for 25years) Maximum Rs.144.00
  Rental Value for Residential Portion Rs.432.00
Ground Floor (Non-Residential) Monthly Rental Value (1200 Sq.Ft. x Rs.4.40) per Sq.Ft. Rs.5880.00
  Depreciation for Age 10% (@ 1% per year for 25years) Maximum Rs.1320.00
  Rental Value after Rebate Rs.3960.00
  Rental Value for Residential Portion Rs.432.00
  Rental Value for Non-Residential Portion Rs.3960.00
  Total Rental Value Rs.4392.00 or 4390.00
  Annual Value (Rs.4390 x 10.92) Rs.47,938.00
  Half Yearly Tax (Rs.47398x12.40%) Rs.5944.00

Method of Assessment For Superstructure Alone.
In various parts of the Chennai City buildings have been constructed over the lands for which the owner of the Superstructure has no title . The assessment for Property Tax for such buildings are being made for Superstructure alone excluding the land for which he is not having any title.
Example: Superstructure only (Residential Building)
For example, in Samiyar Thottam at Saidapet location, if you have constructed a building over the land for which you have no title, the Basic Rate is Rs.0.90 per Sq.ft as per the basic rates for residential properties.
Based on the basic rates and with the reference to the following details of the property the Property Tax is calculated as follows:

1. Location Saidapet (Samiyar Thottam)
2. Basic Rate Rs.0.90 per sq.ft
3. Plinth Area 500 Sq.ft.
4. Nature of Construction Tiled Roofing
5. Usage of the Building Residential
6. Nature of Occupancy Owner
7. Age of Building 15 years

Calculation Of Property Tax

Ground Floor (Residential) Monthly Rental Value 500 Sq.ft. x Rs.0.90 per Sq.ft Rs.450.00
   Rebate for Tiled Roofing 20% Rs.90.00
  Rental Value After Rebate Rs.360.00
  Rebate for Owner Occupation 25% Rs.90.00
  Rental Value after Rebate Rs.270.00
  Depreciation for Age 15% (@ 1% per year for 15years) Rs.35.50
  Rental Value for after Rebate RS.234.50 or Rs.235.00
  Rental Value for the building Rs.235.00
  Annual Value (Rs.235 x 10.92) Rs.2566.00
  Less: Land Value 10% Rs.256.60
  Annual Value after Land value Rs.2310.00
  Half - Yearly Tax (2310x11.02%) Rs.255.00

This will apply for the buildings constructed over Government Lands, Temple Lands etc. The assessment is made in lieu of basic amenties such as roads, street lights, stormwater drains etc. being provided by the Corporation of Chennai. However the assessee can not claim any ownership right for such buildings. The Commissioner has got power to cancel the assessment at any time without assigning any reasons.

Vacant Land Tax:

The Chennai Corporation limits Property tax is also levied on the lands alone for the lands without any building.
Method of Assessment of Tax for Lands without any use: In some places the lands are kept vacant without any use by the owner. The method of fixing Annual Value / Half yearly Tax are as follows:

Monthly Rental Value for 2400 Sq.ft (One Ground) Rs. 8.00
Annual Value (Rs.8 x 12 months) Rs.96.00
Half Yearly Tax is Rs.96 x 6.62% Rs. 6.35

The Half Yearly Tax is calculated as percentage of annual value as per the table given above. Method of fixing Annual Value for Lands taken on Lease or Rent:
In some places the land owner give land for lease or on rent. The annual value is fixed based upon the rent received. The annual value in a specific year fixed as follows:
Annual Value :
Rent Received per Month x 12 Months The Half Yearly Tax is to be calculated as percentage of Annual Value as per the table given above.
Method of Assessment for Special Type of Buildings:

Apart from the Residential and Non-Residential buildings the Method of Assessment of property tax for the following special type of buildings is as follows:

  • Nursing Homes / Hospitals
  • Star Hotels / Lodging Houses
  • Cinema Theatres
  • Marriage Halls

Method of Assessment for Nursing Homes / Hospitals:

While assessing the property tax for nursing homes / hospitals, separate calculations are being done for arriving monthly rental value for hospital portions and for other commercial portion such as medical stores, consulting rooms, shops etc. and residential quarters. Based on this, total monthly rental value has to be calculated, and consequently annual value and half-yearly tax has to be arrived.

Sl.No. Method of Assessment
1 Calculation of Monthly Rental Value for Nursing Homes/ Hospitals Portion For Nursing Home portion in any buildings Annual Rental Value shall be arrived at 13.5% of the Total income calculated as per the tariff rate per room per year, (Total number of room x tariff rate per day x 365 days. Monthly Rental Value for Hospital = Annual Income x 13.5% portion 12 Months
2 Calculation of Monthly Rental Value for Residential / Non-Residential Portion In a Hospital building, for the other commercial portions, such as Pharmacy, Consultancy Room, Shops etc. the basic rate shall be taken from the list of Non-Residential properties. if there is any residential portion, the basic rate shall be taken from the list residential properties. On the basis of the Basic Rate, the Rental Value will be calculated just like other Residential / Non-Residential properties as explained in example-3.
3 Monthly Rental Value for the whole of the Hospital Building The monthly rental value for the Hospital Portion and monthly rental value for other Commercial portions if any put together is total monthly rental value.
4 Annual Value Total Monthly Rental Value x 10.92
5 Half -Yearly tax Consequently, the Half Yearly tax is calculated as percentage of Annual Value as per table given in Page No.3.
 

Star Hotel & Lodging House
As per G.S. MS No.855/of R.D.L.A. Department, dt:19.4.1972, Government has suggested assessment of lodging houses in following manner.
All Lodging Houses in city have been classified into following categories.

  • Posh Hotels / Lodges. (All Star Hotels falls in this category.)
  • 'A' Class Hotels / Lodges (Non Star Hotels/Lodges situated in Posh localities)
  • All other Hotels / Lodges.Cinema Theatres

Method Of Assessment For Posh Hotels / Lodges:

While assessing the property tax for Hotels, separate calculations are being done for arriving at monthly rental value for hotels portions and for other commercial portion such as restaurant, bar, shops and other commercial portions. Based on this, total monthly rental value is to be calculated and consequently annual value and half-yearly tax to be arrived.

Sl.No Method of Assessment
1 Calculation of Monthly Rental Value for Posh Hotel / Lodges For Lodging portion in any buildings Annual Rental Value shall be arrived at 10% of the Total income calculated as per the tariff rate per room per year. (Total number of Room x Tariff rate per day x 365 days) Monthly Rental Value for Lodging = Annual Income x 10% portion 12 Months
2 Calculation of Monthly Rental Value for Residential / Non-Residential Portion. In a Lodging House, for the other commercial portion such as Restaurant, Shops, Bar, and other Commercial Portion. Residential portion, the Basic Rate shall be taken form the list Non-Residential properties. If there is any residential portion the basic rate shall be taken form he list of non-residential properties. On the basis of the Basic Rate, the Rental Value will be calculated just like other Residential / Non-Residential properties as explained in the example.3.
3 Monthly Rental Value for whole of the Lodging House. The monthly rental value for the Lodging Portion and monthly rental value for other Commercial portions if any put together is total monthly rental value.
4 Annual Value Total Monthly Rental Value x 10.92
5 Half Yearly Tax Consequently the Half-Yearly tax is calculated as percentage of Annual Value as per table given on page No.3.

Method Of Assessment For "A" Class Hotels And Lodging Houses:

While assessing the property tax for hotels separate calculations are being done for arriving monthly rental value for hotel portions and for other commercial portion such as restaurant, bar, shops and other commercial portions. Based on this, total monthly rental value is to be calculated and consequently annual value and half-yearly tax to be arrived.

Sl.No Method of Assessment
1 Calculation of Monthly Rental Value for "A" class Hotels / Lodges For Lodging portion in any buildings Annual Rental Value shall be arrived at 20% of the Total income calculated as per the tariff rate per room per year.(Total number of Room x Tariff rate per day x 365 days) Monthly Rental Value for Lodging = Annual Income x 20% portion 12 Months
2 Calculation of Monthly Rental Value for Residential / Non-Residential Portion. In a Lodging House, for the other Commercial portion such as Restaurant, shops, Bar and other Commercial Portion. Residential portion, the Basic Rates shall be taken form the list of Non-Residential properties. If there is any residential portion the basic rate shall be taken from the list of residential properties. On the basic of the Basic Rate, the Rental Value will be calculated just like other Residential / Non-Residential properties as explained in the example 3.
3 Monthly Rental Value for the whole of the Lodging Houses The Monthly rental value for the lodging Portion and monthly rental value for other commercial portions if any put together is total monthly rental value.
4 Annual Value Total Monthly Rental Value x 10.92
5 Half-Yearly Tax Consequently the Half-Yearly tax is calculated as percentage of Annual Value as per table given on page No.3.

Method Of Assessment For "B" Class Hotels And Lodging Houses:

While assessing the property tax for hotels separate calculations are being done for arriving monthly rental value for hotel portions and for other commercial portion such as restaurant, bar, shops and other Commercial portions. Based on this, total monthly value is to be calculated and consequently annual value and Half-yearly tax to be arrived.

Sl.No. Method of Assessment
1 Calculation of Monthly Rental Value for "B" class Hotels / Lodges For Lodging portion in any buildings Annual Rental Value shall be arrived at 25% of the Total income calculated as per the tariff rate per room per year.(Total number of Room x Tariff rate per day x 365 days) Monthly Rental Value for Lodging = Annual Income x 25% portion 12 Months
2 Calculation of Monthly Rental Value for Residential / Non-Residential Portion. In a Lodging House, for the other Commercial portion such as Restaurant, shops, Bar and other Commercial Portion. Residential portion, the Basic Rates shall be taken form the list of Non-Residential properties. If there is any residential portion the basic rate shall be taken from the list of residential properties. On the basic of the Basic Rate, the Rental Value will be calculated just like other Residential / Non-Residential properties as explained in the example 3.
3 Monthly Rental Value for the whole of the Lodging Houses The Monthly rental value for the lodging Portion and monthly rental value for other commercial portions if any put together is total monthly rental value.
4 Annual Value Total Monthly Rental Value x 10.92
5 Half-Yearly Tax Consequently the Half-Yearly tax is calculated as percentage of Annual Value as per table given on page No.3.

Cinema Theatres:

Cinema Theatres are classified into "A" & "B"
While assessing the property tax for Cinema Theatres separates calculations are being done for arriving monthly rental value for Theatre portions and for other commercial portion such as Restaurant, Shops, Vehicle Parking and other Commercial Portions. Based on this, total monthly rental value is to be calculated and consequently annual value and half-yearly tax to be arrived.

Sl.No Method of Assessment
1 Calculation of Monthly Rental Value for Cinema Theatres Out of Total Annual income calculated as per seating capacity of the theatre and tariff rate for each class, 40% shall be set aside towards entertainment tax. Remaining 60% shall be calculated as gross income. Out of gross income, 53% shall be treated as annual income. For 'A' class Theatres, 7.5% of the annual income shall be treated as annual rental value. For 'B' class theatres, 6.5% of the annual income shall be treated as annual rental value. Monthly Rental Value for Cinema= Annual Income 7.5% / 6.5% Theatre portion 12 Months
2 Calculation of Monthly Rental Value for Residential / Non-Residential Portion. In a Cinema Theatre Complex, for the other Commercial portion such as Restaurant, shops, Vehicle Parking and Other commercial Portion, the Basic Rate shall be taken from the list of Non-Residential Properties. If there is any residential portion the basic rate shall be taken from the list of residential properties. On the basis of the Basic Rate, the Rental Value will be calculated just like other Residential / Non Residential properties as explained in the example 3.
3 Monthly Rental Value for the whole of the Cinema Theatres The Monthly rental value for the Cinema Theatres Portion and monthly rental value for other commercial portions if any put together is total monthly rental value.
4 Annual Value Total Monthly Rental Value x 10.92
5 Half-Yearly Tax Consequently the Half-Yearly tax is calculated as percentage of Annual Value as per table given on page No.3.
 

Marriage Halls:

All Marriage Halls are classified into A, B, and C categories with reference to their location i.e. near by Bus Stand, Railway Station, Market etc.
While assessing the property tax for Marriage Hall separates calculations are being done for arriving monthly rental value for Marriage Hall portions and for other commercial portion such as Shops and other Commercial Portions. Based on this, total monthly rental value is to be calculated and consequently annual value and half-yearly tax to be arrived.

Sl.No. Method of Assessment
1 Calculation of Monthly Rental Value for Marriage Halls For ‘A’ category Marriage Halls, Total number of Marriages to be conducted in a year shall be taken as 40. The same shall be 30 for ‘B’ and 20 for ‘C’ category Marriage Halls. Annual Rental Value for Marriage Hall portion is 50% over the Gross charges of the Marriage Hall with Vessels and 60% without Vessels. Monthly Rental Value for Marriage= Annual Income x 50% or 60% Hall portion 12 Months
2 Calculation of Monthly Rental Value for Residential / Non-Residential Portion. In a Marriage Hall Complex, for the other Commercial portion such as Shops etc., the Basic Rate shall be taken from the list of Non-Residential Properties. If there is any residential portion the basic rate shall be taken from the list of residential properties. On the basis of the Basic Rate, the Rental Value will be calculated just like other Residential / Non Residential properties as explained in the example 3.
3 Monthly Rental Value for the whole of the Marriage Halls The Monthly rental value for the Marriage Halls Portion and monthly rental value for other commercial portions if any put together is total monthly rental value.
4 Annual Value Total Monthly Rental Value x 10.92
5 Half-Yearly Tax Consequently the Half-Yearly tax is calculated as percentage of Annual Value as per table given on page No.3.

Annual Value Calculation In General :

For example, if the plinth area of a purely residential building is 100 Sq.ft. and the building lies in a particular Street, the basic rate for which is Rs.1.00 Sq.ft. for the residential properties, the following method has to be adopted to calculate the Rental Value, Annual Value and Half Yearly Tax of that particular building.

1. Monthly rental value of the building (Plinth area x Basic Rate per Sq.ft.) (100xRe.1.00) Rs.100.00
2. Annual Rental Value of the Building (Including land value) (Monthly rental value x 12 months) Rs.1200.00
3. Land value - 10% of the Annual Value of the Property (Rs.1200x10%) Rs.120.00
4. Annual Value for the Building alone (Rs.1200 - Rs.120) Rs.1080.00
5. Less 10% Depreciation for building for repairs and maintenance (Rs.1080x10%) Rs.108.00
6. Depreciation value of the building (Rs.1080-Rs.108) Rs.972.00
7. Value of the land Rs.120.00
8. Annual Value for the land and building (Rs.972+Rs.120) Rs.1092.00

Note :

  • The property owners are requested to fill the Form No.6 for new assessment and Form No.7 for Additions and alteration
  • In case of sub-division of property, Form No.8 should be used. The cost of the Form is Rs.100/- . Separate form should be used for each sub-division portion.
  • For change of ownership, Form No.9 should be used. The cost of the application Form is Rs.50/-