There is some respite for the severely hit realty sector in Bengaluru. The Stamps and Registration department, which was all set to start the guidance value revision exercise, has decided to put it on hold. This, thanks to demonetisation, which has hit property registrations hard and in turn dipped revenue.
The guidance value revision of properties for the next financial year was on the cards and the Central Valuation Committee that oversees the exercise had held preliminary meetings. The last revision was carried out in November 2015 and new property rates were rolled out from April 2016.
“The revision exercise was about to begin and the ground work was being readied. But post-demonetisation, things changed. The realty industry which is already seeing a slump will further be hit if the property revision happens. The Central Valuation Committee decided to put it on hold,” said a senior official in the stamps and registration department.
Touted by the department as the “recession part II,” 8/11 has downed the department’s revenues. Sub-registrar offices, buzzing with people who used to register not less than 20-25 documents per day, today virtually is deserted. “The coming days will be the second part of 2008 recession. My office used to register a minimum of 15 property documents daily. It is not even three now. Registration in several sub-registrar’s offices have have hit rock bottom with at least 80% dip in numbers. Also, this is a clear indicator that the Bengaluru realty industry is largely dependent on black money,” the official explained.
Since the last two revisions, the department has been trying to bridge the gap between the government value and the market value of properties, which is around 25-30%. But DeMo is being seen as a natural leveller. “There will be a market correction as the Bengaluru property market is unreasonably high. This is the time market values will tumble and one can expect real-time prices. The old sale/purchase agreements are being inked now but the new ones will get delayed. People will wait for the prices to come down to pick up new properties,” the official pointed out.
However, speculations are rife that the government may even consider bringing down the stamp duty from 5.5% to 5%. The total property registration component is 6.6% of the transaction — 5.5% stamp duty, 1% registration and 0.1% cess.
Credits Bangalore Mirror