Frequent changes and steep hike in registration charges have put flat promoters and buyers in a fix in the State.
The Registration Department has effected three major changes in the registration of documents for flats since July. Any flat buyer, until July 9, had to pay 4% of the value of the undivided share (UDS) and 2% of the total value of the construction agreement as stamp duty and registration fee. The stamp duty and registration fee went up to 4% in addition to 4% on UDS value from July 10.
The department has introduced another change with effect from December 1, 2023. As per the order, the buyers have to pay 6% of the total value of flats priced less than ₹50 lakh as registration fee and others. If the flats are valued at more than ₹50 lakh, the registration fee will be 7%. Moreover, the value of flats will be fixed depending upon the composite value, which is to be fixed by the Registration Department.
According to the members of Confederation of Real Estate Developers Associations of India (CREDAI), the registration charges that are now collected separately for land and construction, will, from December 1, be collected as a single charge. The higher the value of the property, the more will be the charges paid.
For instance, for an apartment unit that was priced at ₹30 lakh, the buyer had to pay about ₹80,000 towards registration fee and others until July 9. It went up to about ₹1.3 lakh since July 10 and about ₹1.8 lakh from December 1.
Flat promoters allay the fear that the fixation of composite value will derail the industry. It is said that the Registration Department will fix the composite value of the flats, similar to guideline value of lands, for each area. The value is said to have been fixed for three categories — basic, premium and ultra premium apartments. They say it is unfair to fix composite value for flats. It will ultimately lead to “background deals” in determining value.
“The fixation of composite value for flats will complicate the registration process. It will add a burden to the buyers, including those buying budget flats. The buyers, who depend upon bank loans, cannot be subjected to higher taxation. It will bring the spirit of flat promoters,” says P. Ravichandran, a member of Confederation of Real Estate Developers Associations of India in Tiruchi.
Sources in the industry said that several buyers, who booked flats, had cancelled their bookings and demanded repayment of dues. The State government should intervene in the issue. The pre-July 10 system of registration fee should be reintroduced.
Published - December 09, 2023 08:49 pm IST
