The Tamil Nadu government’s Budget announcements on revising the property guideline value to the rates prevailing till June 2017 and reducing the registration fee to 2% have evoked a mixed response from stakeholders.
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“There have been constant requests from various stakeholders to revise the guideline value in tune with the market prices, and to reduce the registration fee. The government has constituted a committee to suggest the revised guideline value. The survey number-wise revision is expected to take time. Since the market value has risen steeply, as an interim measure, the government has decided to revise the guideline value to the rates prevailing till June 8, 2017 and to reduce the registration fee to 2%,” Finance Minister Palanivel Thiaga Rajan said.
Jerry Kingsley, head of strategic consulting and valuation advisory India, and city lead, capital markets – Chennai, Jones Lang LaSalle, said the increase in guideline value may have a mixed impact on property transactions, “In markets where the present market value of land had surpassed the 33% appreciation since 2017, the revision will ensure registrations at market value, and the buyer will benefit from a reduced registration cost. However, in markets where significant appreciation did not take place since 2017, the buyers will have to register at the revised guideline value, which would be higher than the market value, thus eroding the impact of the reduced registration cost, affecting the sales in these micro-markets.”
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“The increase in guideline value proportionately increases the premium FSI costs, and thus decreases the land values to an extent due to an increase in cost to the developers,” he added.
Srinivas Anikipatti, senior director, Tamil Nadu & Kerala, Knight Frank India, said, “The reduction in registration fee from 4% to 2% for land buyers will boost demand for land and reduce the overall acquisition cost. This, in turn, will reduce the final project cost.”
A. Mohamed Ali, president-elect, CREDAI Chennai, said, “The Tamil Nadu Budget for 2023–2024 is quite optimistic for the entire real estate industry.”