The Communist Party of India (Marxist) (CPI(M)) has called for an immediate halt to the ongoing property tax increases in Andhra Pradesh's urban areas. State secretariat member Ch. Babu Rao criticized the continuous annual hike and the existing capital value-based taxation system, urging the state government to scrap it entirely. This demand comes as urban residents face a significant financial burden, with taxes nearly doubling over the past five years.

What Happened?

During a recent media address, Mr. Babu Rao highlighted the shift to the capital value system for property tax, which replaced the older rental value-based method. This change was implemented in 2020 by the then YSRCP government through amendments to the Municipal Act (44/2020) and Government Order (G.O.) No. 198. Mr. Rao alleged that this system was introduced under pressure from the BJP government at the Centre. Since the financial year 2021–22, property taxes have increased by 15% annually, placing a substantial burden on families.

Mr. Babu Rao pointed out that property taxes have nearly doubled in the last five years due to these consistent increases. He noted that despite the Telugu Desam Party (TDP) previously opposing these tax hikes and promising reviews when in opposition, the current coalition government has continued the same policies. Demand notices for the 2026–27 financial year are expected soon, indicating the trend of rising taxes will persist. If this pattern continues, Mr. Rao warned, the cumulative tax increase could reach nearly 45% by 2029, intensifying financial strain on citizens.

The financial impact of these policies is significant across the state. Property tax demand in 123 cities and towns has escalated from ₹2,450 crore in 2021 to ₹3,900 crore presently. Mr. Rao accused the government of inflating property values to artificially boost revenue through higher registration charges and taxes. Additionally, he raised concerns about penalties being levied on homeowners, alleging that charges ranging from 25% to 100% are imposed annually for supposed building plan violations. He criticized the imposition of heavy penalties on poor households, especially those lacking formal property titles, deeming it unjust.

Key Highlights

The CPI(M) State secretariat member Ch. Babu Rao demanded an immediate halt to property tax increases.
He called for the abolition of the capital value-based taxation system in Andhra Pradesh's urban areas.
The capital value system replaced the rental value system in 2020 under the YSRCP government.
Property taxes have been rising annually by 15% since the financial year 2021–22.
Taxes have nearly doubled over the past five years, with projections for further increases.
The current government continues the tax policies despite earlier opposition promises.
Concerns were raised over high penalties (25%–100%) imposed for building plan violations.
Benefits for poor households, like a nominal ₹50 tax for small homes, are allegedly not being implemented.

Why Does This Matter?

This issue directly impacts thousands of urban residents across Andhra Pradesh, particularly those with fixed incomes and vulnerable households. The continuous 15% annual increase in property taxes creates an unsustainable financial burden, making it harder for families to manage their essential expenses. The shift to a capital value system, coupled with alleged inflated property values, means that property owners are paying more, regardless of their actual income or the rental value of their property. This situation reduces disposable income, affecting the overall economic stability of many households.

Furthermore, the concerns raised about steep penalties for building plan violations and the alleged failure to implement nominal tax benefits for small homes highlight an unfair system. Poor households, often lacking formal titles or resources to comply with complex regulations, face disproportionate burdens. The CPI(M)'s demand underscores the need for a transparent, equitable tax system that does not penalize citizens, especially the most vulnerable, but instead supports their economic well-being. A review of these policies is crucial to ensure that urban development does not come at the cost of its residents' financial security.