BENGALURU: With guidance value to increase from Friday, buyers have been making a dash for sub-registrar offices to get their properties registered. This has spelled relief for the government, which is facing a revenue shortfall due to severe drought and drinking water crisis.
The department of registration and stamps one of the highest contributors to the state’s kitty has achieved its target of Rs 8,200 crore revenue for the fiscal 2015-16. “We have managed to meet the target just a day before the deadline,” said NV Prasad, inspector-general of registrations and commissioner of stamps.
Last year, the revenue department proposed an increase in guidance value of properties by 10% to 30% but decided against implementing it following stiff opposition from the realty sector. In February, it decided to implement the hike from April 1 to fix the shortfall of Rs 2,000 crore in revenue collection from the stamps and registration department for 2015-16.
As expected, the revenue from stamp duty earned on the registrations amounted to approximately Rs 2,000 crore, a record collection in one month in recent years. March saw almost one lakh property registrations in the state. “The department was hoping that people will rush to buy or register properties ahead of the hike and it worked. The hype created by real estate agents and builders also helped,” the source said.
Officials said the department had extended work timings by four hours to deal with the mad rush at various sub-registrar offices in the past one month. Till January 31, 2016, the department of registration and stamps had collected Rs 6,200 crore as against the Rs 8,200 crore target. The latest guidance value hike 10%-30% on an average is the lowest in recent years. The last revision was done in 2014 when the average hike was 50%.
Will drill deeper hole in pockets
The common man will be hit hard. Property prices are falling due to lack of demand. Increasing taxes will dampen the spirits of aspiring buyers further. Dealing with the hike will be more difficult for those who want to buy a new flat by selling an old one. That’s because the selling price of old flats is down due to falling rates while buying a new one will only be more expensive due to increasing taxes. – Vivek Das, builder
Not the right approach
The proposed increase in property tax and guidance value does not augur well for the current market sentiment. The ultimate sufferer is the home buyer. Any tax or levy should be in line with the service rendered. The government should be more practical and ensure all properties are correctly assessed and the right taxes are collected. Increasing guidance value is not the right approach to increase tax collection. It’s been proved time and again that lower taxes lead to better compliance and collection. – Suresh Hari, secretary, Credai, Bengaluru.
Credits ET Realty