CHENNAI: Cost of apartments across Tamil Nadu may see a steep hike as the state government has introduced a flat 9% registration charge on the total cost of the flat with immediate effect. Hitherto, separate registration charge was charged for sale deed (9%) and construction agreement (4%).
For example, a home buyer who had to pay Rs 2.35 lakh for buying a Rs 50 lakh flat—(9% charged on undivided land share of Rs 7 lakh) and 4% registration charge for construction agreement (Rs 43 lakh)—will now have to pay flat 9% or Rs 4.5 lakh registration charge on the flat cost of Rs 50 lakh.
B Jothi Nirmalasamy, secretary, Commercial Taxes and Registration, said the decision was taken to stop misuse and collect correct registration charge. The secretary has asked the Inspector General of Registration to issue instructions to registering officers, “not to insist on addition of building with undivided shares in respect of first sale of flat with land in a real estate project for the sole reason that ‘completion certificate’ was issued in respect of building.”
“This would mean that instead of UDS (Undivided land share) and construction agreement charges, they want the registration to be done under single agreement after the completion certificate,” said president of Confederation of Real Estate Developers’ Associations of India (CREDAI) S Sivagurunathan. The decision may impact government and home-buyers more than developers. Home-buyers who had bought but have not yet register flats may be affected.
“The practice of registering UDS and construction agreement is in vogue in Tamil Nadu based on a Supreme Court judgment. Since there was some confusion over GST and other issues raised by a few sub-registrars post implementation of completion certificate, we had represented to the then chief secretary under previous government and got a clarification” S Sridharan, national vice-president, CREDAI National, said.
‘Move may bring down registration revenue’
“But now, insisting on single documentation will have a huge financial impact on customers. It will also reduce the number of registrations and registration revenue. This may result in cancellation of bookings. Overall it will create a negative impact in the housing industry. Only recently the registration charges on construction agreement and power of attorney were raised. This is an additional burden on customers,” said S Sridharan, national vice-president, CREDAI National.
“What would happen to those who had already bought the flat but yet to register? We had already agreed upon on the flat cost depending on prevailing rates. Now, we again have to go back and demand more money,” said Sivagurunathan.
9% registration charge on total cost of apartment
A flat 9% registration charge will be imposed on the total cost of the apartment with immediate effect across Tamil Nadu to prevent misuse. Hitherto, separate registration charge was charged for sale deed (9%) and construction agreement (4%).