Apartment buyers who hitherto registered only the undivided share of the land (UDS) have to henceforth register their construction agreement too and pay two per cent additional charges towards it.
Unlike the registration charge for the UDS, which is based on the guideline value of the land, registration charges for the construction agreement would be calculated on the apartment cost and other considerations mentioned in the agreement. The government order notifying this change came into effect on Tuesday.
For a 1,000-sq.ft apartment with 300 sq. ft UDS and priced at Rs 40 lakh, the buyer till now paid only for registering the UDS. If the guideline value of the land is Rs.1,500 per sq. ft, registration charges, which is 8 per cent, including stamp duty, worked out to Rs. 36,000 (Rs.1,500 X 300sq.ft) X .08). Under the new rules, the buyer has to register the construction agreement for the remaining value of Rs. 35.5 lakh. The additional registration charges – one per cent for stamp duty and one per cent for registration fee – would be Rs. 71,000.
The government amended the Registration Act to make registration of documents such as power of attorney and construction agreement compulsory from December 2012. However, the bill pertaining to amending the Stamp Act that facilitated levy of new charges received the President’s assent only on September 3.
C.H Gopinatha Rao, former national president, Institution of Valuers, welcoming the move, said it would help safeguard the interests of owners and developers. “When second hand apartments are sold, the registration charges are based on the value of land and building. It is only in the case of new apartments that UDS alone is registered. Now, sale of old and new apartments is almost brought on par,” he added.
But R. Kumar, Chairman CREDAI, Tamil Nadu chapter, feels otherwise. “At a time when people are struggling to buy a home at high cost, this directive will be an additional burden on the buyers. It is also a hassle because it would involve one more registration process. Unless the Registration department improves infrastructure, there would be delays and people would end up waiting for a longer time.’
The government has also notified changes to stamp duty for instruments of partition, dissolution of partnership and settlement among family members.