Property tax on commercial property in Chennai: how it's worked out, and who pays

The Greater Chennai Corporation (GCC) taxes a building on its letting value, worked out from its plinth area and the basic street rate (BSR) for its street and use:

1. Monthly rental value = plinth area × BSR.
2. Annual value = monthly rental value × 10.92 (after allowing 10% for the land and 10% for maintenance).
3. Half-yearly tax = 12.40% of the annual value: 9% general tax, 2.5% education tax and 0.9% library cess.

In one line: half-yearly tax = plinth area × BSR × 135.408%.

Each street has its own BSR for each use; GCC publishes the list and an online calculator. The ₹10 above is only for the arithmetic.

• Streets have separate rates for residential, non-residential, industrial and other uses; commercial use is taxed higher than residential.
• The industrial rate applies only with a licence from the Directorate of Industrial Safety and Health.
• Buildings with a semi-permanent roof get 20% off the rental value.
• Changing a building's use, say a house into an office, must be reported within 30 days, with a penalty of up to ₹2,000 if it isn't. Unassessed or under-assessed property can be taxed for up to 13 past half-years.

The year has two halves, April–September and October–March. Pay the half-year in full by 30 April or 30 October and the general-tax part is 5% less, up to ₹5,000. After the half-year ends, interest runs at 1% a month.

• 2022: the state revised property tax; commercial buildings in the city's core saw rises of up to 150%. The Madras High Court upheld the revision but ruled out collecting it retrospectively.
• September 2024: the GCC council passed a 6% yearly increase, after a state order tied to Finance Commission grants.
• August 2026: GCC halted a drive to reassess "under-assessed" properties and went back to the earlier demands; the rates themselves weren't raised.

GCC's rule is simple: the owner or the occupier is liable. In SNE's experience the owner usually pays it on a commercial lease, but that's practice, not law; write it into the lease either way, with water and sewerage charges.

Before you sign, ask to see the latest receipt, and check the assessment matches how the space is used. A house rented as an office should be on the non-residential rate; if it isn't, the arrears can come later.

Companies also pay company tax each half-year, by paid-up capital: from ₹300 below ₹1 lakh to ₹3,000 at ₹10 lakh and above.