Tamil Nadu is considering an increase in property tax and a few other local levies in municipal corporations and municipalities, according to officials from the Municipal Administration Department.
The department oversees 25 municipal corporations, 146 municipalities and 479 town panchayats. Officials said urban local bodies are facing a severe financial crunch as expenditure continues to outpace revenue.
They cited recent collections to underline the gap: Chennai Corporation collected Rs 1,765 crore in property tax in 2025. Other corporations collected Rs 1,814.59 crore, municipalities Rs 646.62 crore and town panchayats Rs 311.62 crore.
Officials noted that the 15th Finance Commission recommends raising urban property taxes in line with the state’s gross domestic product growth, warning that failing to do so could affect central grants. With the 16th Finance Commission now in place, the government is looking to improve collections and is considering a one-time increase of up to 100%, followed by annual hikes of 6% to 10%.
