KOCHI: The state budget has come as a big shock to real estate sector in Kerala. Eyeing more revenue from stamp duty, the state has jacked up fair value of land by 10 per cent while it will be 30 per cent for notified areas near largescale projects.
Industry experts say the decision to hike fair value is a retrograde step further pulling down an industry which has been struggling for the past two years following demonetisation, flood and employment crisis in Middle East.
“The Maradu demolition drive has already dented the image of real estate sector in the state. Transactions are already less and instead of giving a boost to the sector, the finance minister has pulled the sector back by hiking the fair value of land. Kerala has the highest fees for land registration in the country. The real estate sector has received a raw deal from the government,” said CREDAI Kerala former chairman and SI Properties managing director S N Raghuchandran Nair.
He said the decision to hike the fair value by maximum 30 per cent for land near mega projects will have big negative impact.
Document writers say the business is already dull and people will now have to shell out more money for land registration as majority of the registration is done based on the fair value fixed by the government.
“The real estate sector still hasn’t recovered from the downturn following demonetisation and employment crisis in Middle East,” said All-Kerala Document Writers and Scribes association state president KG Indhukaladharan.
He said the hike in fair value for land will affect ordinary people who are looking to buy five to 10 cents of land for constructing house.
Abad Builders managing director Dr Najeeb Zackeria said that, while the decision won’t make much of an impact on the major builders, who are already paying stamp duty above the fair value, it is going to badly affect those who are eyeing small tracts of land for constructing a home.
WHAT THE BUDGET SAYS?
As there are no clear guidelines for valuing buildings other than flats for the purpose of stamp duty, amendments will be made in the Kerala Stamp Act to value such buildings as per CPWD rates and the government is targeting an additional revenue of Rs 225 crore from this.
10 per cent increase will be made in the existing fair value and Rs 200 crore is expected through this measure.
Implementation of largescale projects will lead to rise in market value of surrounding plots. Hence notified land near such largescale projects will be valued at a maximum of 30 per cent above the declared fair value.