CHENNAI: The Tamil Nadu government has amended the rules for estimation and revision of guideline value of properties -- or market value guidelines (MVG) as it’s officially known -- potentially enabling it to do a state-level revision of MVG through the Valuation Committee (VC) expeditiously without going through the decision-making process involving district-level committees.
These amendments to the Tamil Nadu Stamp (Constitution Of Valuation Committee For Estimation, Publication And Revision Of Market Value Guidelines Of Properties) Rules of 2010, which could have wider implications on revision of MVG, were notified on June 23 based on a government order (GO) issued on the same day.
Incidentally, in 2023, the Madras HC had set aside a state government’s move to rationalise the guideline value over a lack of adherence to “due process”, including steps involving district-level committees.
Though the GO said the amendments were based on a proposal from the Inspector General (IG) of Registration, it did not elaborate on the proposal’s details. Officials from the Commercial Taxes and Registration Department (CTRD) were not available to comment on the rationale behind the amendments.
As per the original 2010 rules, the MVG revision, expected to happen annually, should commence with an issuance of instructions and policy guidelines by the VC-- a state-level committee headed by IG of Registration -- to Valuation Sub-Committees (VSCs) in every district.
The VSCs will then advertise the commencement of the process in local newspapers to invite feedback and decide and finalise the MVGs after multiple rounds of deliberations.
However, a key change in the present amendment is the inclusion of a sub-rule that read “provided that if no general revision has taken place in the preceding year, the VC for reasons to be recorded may issue instructions for general revision, at any time of the calendar year, to be brought with effect from any specified date”.
This indicated that the VC could enforce a revision with immediate effect if “general revision” had not happened in the previous year.
It is noteworthy that such general revision of MVG has not happened in TN since 2012. Moreover, in 2017, the then AIADMK government slashed MVG across the state by 33% in one go while increasing the registration fee from 1% to 4%.
In March 2023, the present DMK government issued a circular to set aside this 33% cut, effectively bringing the MVG to the rate that was existing in 2012. However, the Madras High Court struck it down a year later, stating that the government did not follow “due process”, involving the VCs and the VSCs.
Another key amendment appeared to be the replacement of the phrase that VSCs shall meet to “discuss and decide on” estimation and revision of MVG with merely “consider”.
“This effectively renders the district committees toothless,” said A. Arumuga Nainar, advocate at the Madras High Court and former Additional Inspector General of Registration. “It opens the door to future legal challenges, especially since the HC had previously struck down an upward revision done without public consultation, citing natural justice violations,” he added.
Besides these changes, the amendment also offers more clarity in calculating “composite value” for apartments, introduced in December 2023 to replace the earlier requirement of registering flats and the undivided share of land (UDS) separately.
Realtors had then expressed concerns over lack of clarity on calculation of composite value while welcoming the concept.
The amendment defined composite value as “the market value of apartments / flats /villas /villament / row houses including undivided share of land and calculated on the basis of super built-up area”. It added that amenities available, proximity to places like market or bus stands, width of the road, quality of construction, and any other special features be factored in for calculating composite value of apartments during periodic revision.
To TNIE’s queries, a spokesperson from the Registration Department said that the changes were clarificatory in nature. “Nothing has changed from the valuation process. Apartment valuation was already included in the category of properties in the valuation rules. Now, to give more clarity, the words ‘composite value of apartments’ is brought in this amendment,” the spokesperson said. However, no explanation was offered on the other key amendments.
TNIE reached out to Secretary of CTRD Shilpa Prabhakar Sathish, IG of Registration Dinesh Ponraj Oliver, and Housing Secretary Kakarla Usha, who had issued the GO as she was also the Secretary of CTRD in Full Additional Charge until June 23, when Ms Shilpa was appointed to the post as part of a major reshuffle of around 50 bureaucrats that day. None were available for comment despite multiple attempts.