TN signs MoU to cut stamp duty, property tax

CHENNAI Oct. 10. Tamil Nadu is one of the eight States, which have signed memoranda of understanding with the Union Government for a gradual reduction of stamp duty, registration charges and property taxes, so as to avail itself of assistance from the National Urban Reforms Incentive Fund, Bandaru Dattatraya, Union Minister of State for Urban Development and Poverty Alleviation, said today.

The Rs. 500-crore (sanctioned in this year's budget) fund was set up to speed up housing activity through incentives for the States to take up taxation and legal reforms, he told a press conference here. The Centre wanted all States to reduce the stamp duty to a uniform five per cent in the next three-four years.

Asked about Tamil Nadu and a few others still having very high stamp duty rates and registration charges which seemed to impede housing development, he said the Centre's intention in setting up the fund was to reverse this trend. The reforms undertaken by each State would receive weightage; and thus it would become eligible for assistance as per the size of the urban population.

Asked what would happen to the revenues of the States if they reduced the levies, the Minister said: ``Our experience is that when tax rates come down, there is more collection.'' More property would get registered and ``underhand dealings in registration offices will come down.''

Mr. Dattatraya said housing was a priority area for the National Democratic Alliance Government. In the last five years, 85 lakhs houses had been built.

Slum policy

The National Slum Policy was getting final touches. Many States had given their feedback to the draft policy. Once it was finalised, the Ministry would place it before the Cabinet, before tabling it in Parliament.

The policy aimed at helping the 6.18-crore slum population. ``One feature would be its objective of tenurisation of housing. Most of the slum houses come up without any land document and so the slum residents do not have any security of tenure. Once you grant them tenure on the land by giving `pattas', the people will construct better houses. But the patta has to be given in the joint name of the husband and the wife so that the husband does not sell away the land.''

The policy would encourage in-situ development and improvement of slums, and seek to relocate people only if a settlement was prone to flooding or fires or was situated too close to rail track.

HUDCO ready to fund Secretariat project

Mr. Dattatraya said the Housing and Urban Development Corporation was prepared to fund the new Secretariat complex coming up in south Chennai. ``We have agreed in principle. The HUDCO's oficials met State Government representatives and discussed the issue.''

V. Arulkumar, HUDCO's regional Chief in Chennai, however, said no specific proposal had come from the State seeking funds. ``We have told them we have the money and once we have a bankable project, we can provide funds.''

Mr. Dattatraya said the HUDCO had identified proposals to extend a loan up to Rs. 1,600 crores for housing, water supply, road and bridge construction, and other city infrastructure in Tamil Nadu for the current year.