The Hindu 29.08.2009
Steep hike in property tax for hostels, mansions
Staff Reporter
Mansions to be reclassified as tenant commercial.
CHENNAI: Hostels, mansions, lodges and serviced apartments will soon have to pay more property tax with the Chennai Corporation council on Friday passing a resolution to reclassify them as “Tenant Commercial.”
At present, they are classified as residential properties.
Although these establishments serve as temporary residences, they are being used for commercial purpose and hence the reclassification.
The increase in property tax would be up to three times. However, the civic body does not maintain separate data on all such establishments.
For lodging houses, the Corporation levies a special rate of property tax based on the rent that such facilities charge. “In many places, the mansions, which are supposed to let out rooms on a monthly basis, rent them out on a daily basis, which reduces the Corporation’s revenue,” said a senior official of the civic body.
Serviced apartments, which are becoming popular in the city, pay their property tax under the residential category. Such apartments are preferred by companies, those coming for medical treatment and employees of IT firms.
S.Selvakumari, who has a few service apartments, said with the slowdown in the economy, many companies that use to rent out facilities were demanding a reduction in rent. “Our services do not just include bed and room. The cost of pulses, oils and rice have shot up. We have taken this property on lease. This increase in tax would only add to the burden.”