The Chennai Corporation assesses property tax for every holding based on certain factors. These are plinth areas or the total floor area, including external and internal walls, and the standard rental value in the area or base street rate per sq. ft.
Now, the total annual rental value (ARV) is calculated in the following manner.
Step 1: Plinth area x Base street rate per sq. ft. = Monthly rental value
Step 2: Monthly rental value x 12 months = Annual rental value (ARV)
Step 3: Total ARV – 10% of ARV for land value = ARV for building only
Step 4: Discounts depending on the nature of occupancy (rented or owned), usage (residential or commercial), and age of property are applied on the ARV for the building to arrive at its depreciated value.
Therefore, Depreciated building value = ARV for building - Total discount
Step 5: Depreciated building value + Land value (10% of total ARV) = ARV for land and building
Does this calculation procedure appear too complicated?
Worry not! This detailed procedure was to help you understand how you can arrive at the annual value. However, there is an easier process to calculate property tax in Chennai for buildings.
Consider a common factor 10.92. Now, use the following formula to calculate the annual rental value (ARV).
ARV for building = Monthly rental value x 10.92
On the other hand, the annual value for land does not include any depreciation. Therefore, calculate the annual value for land as follows.
ARV for land = Monthly rental value x 12
Now, the half-yearly property tax is calculated as a specific percentage of this annual value. You can refer to the following table to understand the different percentages for Chennai property tax calculation upon different amounts.