Shankar Roy has been in the process of buying a flat of his own for two years now. He entered into a sale agreement with a builder on the South-East outskirts of the city, and the flat is expected to be handed over to him in the next three months, when the property will be registered in his name. However, he has now run into an unforeseen problem.
The guidance value of his flat has shot up by nearly 50%, in effect from October 1. Now the stamp duty and registration charges for his flat - 6.65% of the guidance value of the flat - has also shot up severely. He is now likely to have to shell out an additional ₹2.5 lakh for registering his flat.
He’s not alone. Thousands of homebuyers across the city are facing the same problem, as the State government hiked the guidance value in the city by an average of 30% to 40%, from October 1, almost five years since the last revision. In some cases, especially on the city’s outskirts where most apartments and gated communities are coming up, even up to 80-100%.
Property buyers have to shell out 4% stamp duty for properties worth less than ₹45 lakh and 6% for those above, apart from 1% registration charges and 0.65% cess and surcharge.
Appeal to consider guidance value as on date of sale deed
The Confederation of Real Estate Developers’ Association of India - Karnataka and the Forum for People’s Collective Action (FPCE), a forum fighting for homebuyers’ interests, have now appealed to the State government to consider the guidance value as on the date of the homebuyer entering into a sale agreement with the developer for registration, and not as on the date of registration of the property.
“The cost of registration of the property has suddenly gone up by several notches. Already stressed homebuyers, especially those who have taken loans and are struggling to make ends meet, are again stressed. Some may now be forced to take loans again. We appeal to the government to consider the guidance value as on the date of the sale agreement for registration,” said Santosh Patil, a founding member of FPCE.
Suresh Hari, secretary, CREDAI - Karnataka, said while this hike in guidance value doesn’t matter to those in the luxury homes sector, it had put considerable pressure on the mid- and lower-income group housing projects.
“We have requested the government to consider the guidance value of the property as on the date of the sale agreement,” he said.
Tax complications too
Property consultant K.R. Ramesh said the hike in guidance value also presented several tax complications as the difference in the guidance value is considered an income.
“The only solution for this is to give a six-month window before the new guidance value comes into force, so that all the pending sale agreements will go through and properties registered. This time, the window given, before the new revised guidance value came into force, was only 15 days. So thousands of homebuyers are currently facing this conundrum,” he said.
Can’t be done as per law
Mamatha Gowda, inspector-general of Registration and Commissioner of Stamps, said that the law, as it stands today, was clear that stamp duty has to be levied on a transaction as per the guidance value of the date of presentation of the documents for registration. “This has been the practice for many years now,” she said.
Only the State government can take a call on the request, sources said.
