The State government collecting registration charges based on the composite value of apartments from December 1, 2023 has brought registration of flats in the projects that are under construction and new projects to a standstill, said members of the Confederation of Real Estate Developers Associations of India (CREDAI), Coimbatore.
Gugan Ilango, president of CREDAI Coimbatore, D. Abhishek, vice-president, and Rajiv Ramaswamy, treasurer, of CREDAI Coimbatore, told The Hindu on Tuesday that since December 1, the government collected 6% of the composite value of the apartment (new ones) as registration charges for flats priced at less than ₹50 lakh each and 7% for those priced more than ₹50 lakh. This resulted in several confusions and registrations of projects that were under construction had almost stopped.
The registration cost from July 7 to December 1 last year was 9% on land and 4% on construction. If the built up area of an apartment unit was 1,550 sq.ft and its total cost was ₹59,67, 500, the registration cost worked out to ₹2.75 lakh.
However, after December 1, the registration charge was 7% on the composite value, and the charges worked out to ₹4.17 lakh.
In the last one year, there had been multiple changes related to registration of properties. Further, now there was registration of just one document with government fixing the guideline value for apartment units. It had said that rates would be fixed for each street depending on whether the apartment was normal, premium, or ultra premium.
So, now, the property promoter and potential buyer should register an agreement for sale, for which the registration charge was just 1% of the advance received. Only after the completion of the project could the sale deed of the property be registered at the composite value.
The promoters could not take advance amount in different phases of construction, the customer would find it difficult to get bank loans, and the revenue for the government had dropped, they said.
This system required changes in the way RERA approvals were got. Further, a customer could purchase a plot paying 9% on land value and construct without paying any registration fees. There was confusion in fixing the guideline value of apartment or villa, and customers had to incur additional GST charges, they added.
Hence, the government should reduce the registration charges from 7% to 5%, release a single document as legal document as per RERA guidelines, and fix the guideline value for apartments and villas as guideline value for land per sq.ft and the PWD rates applicable for construction, the Confederation said.
