Monday 26 March 2018

Maharashtra finally clears way for drop in stamp duty on real estate sale


The state revenue and forest department has issued the Bombay Stamp (Determination of True Market Value of Property) (1st Amendment) Rules, 2018 that will allow the CCRA for the first time to either increase or decrease the RR rates.




MUMBAI: Homebuyers could expect some relief as the state government has introduced a provision that will allow reduction of Ready Reckoner (RR) rates. Until now, RR rates, which are revised annually, could only be increased or kept steady.

RR rates are used to assess market value of properties by government; stamp duty and registration charges are paid on this basis. The rates are revised every year on April 1.

The state revenue and forest department has issued the Bombay Stamp (Determination of True Market Value of Property) (1st Amendment) Rules, 2018 that will allow the Chief Controlling Revenue Authority (CCRA) for the first time to either increase or decrease the RR rates.

The March 12 notification amends rule 4 that says in case the CCRA cannot issue an annual statement of rates then the preceding one may be “incremented” in view of “increase” in market rates. The word “incremented” has now been replaced with “revised” and “increase” with “increase or decrease”. The change in the wording signals the government’s acceptance of the fact that real estate rates have dipped in recent years.

Mumbai is divided into 700 zones for which RR rates are prepared annually. In the last five years, rates for these zones have been increased by 6-7% annually. However, it was not always so. In 1995, 1996, 1997 and 2001, the government, despite there being no amendment, had reduced the RR rates.

Commenting on the latest change in rules, property valuers said RR rates need to reflect true market value. Mayur Shah, president, Maharashtra Chamber of Housing Industry, said they have been urging the government to reduce the RR rates as the real estate industry has been in a bad shape for the past three-four years.

Shah said CREDAI-MCHI is considering recommending a 20-25% reduction in RR rates. “Earlier, rates were only increasing. Now that Maharashtra, like other states, has a provision to decrease the rates, housing will get a boost,” he said.

The increase or reduction in RR rates impacts buyers in a significant way as the 5% stamp duty is to be paid as per RR rates; in some cases, the actual sale may have taken place at a lower rate.

Sunit Gupta, a property valuation expert, said the RR rate for Nariman Point, for instance, is Rs 50,000 sq ft while the market rate is Rs 30-35,000 per sq ft. “Also, builder and buyer have to pay income tax based on the RR rates and not the market rate,” he said.

It is the joint director of town planning and valuation who annually assesses rates of lands and buildings for every tehsil, municipal corporation and local body area and prepares a statement. The CCRA then approves these rates and they come into force. 



Friday 9 March 2018

Punjab govt approves affordable housing policy

This would help make these available to the lower income groups on affordable price. Plot sizes in such colonies shall be maximum up to 125 sq yards and their average size shall not exceed 100 sq yards.




CHANDIGARH: The PunjabCabinet on Wednesday paved the way for the notification of the Affordable Colony Policy - 2018 to facilitate affordable housing for lower income groups, thereby also checking the mushroom growth of unauthorised colonies.

With most unauthorised colonies found to have small sized plots that are normally purchased by economically weaker section (EWS) and lower income group (LIG), the state government had decided to relax certain provisions in approved colonies, including relaxation in saleable area, FAR etc., with the aim to make plots available to the common man on affordable rates.

The Cabinet has now given its nod to the new policy, aimed at offering higher density and floor area ratio (FAR) to the promoters who were keen to develop an affordable colony, according to an official spokesperson in a release.

The new policy has proposed rebate in rates pertaining to Change of Land Use (CLU), External Development Charges (EDC) and License Fee (LF) to enable construction of the maximum possible number of flats over an acre of land.

This would help make these available to the lower income groups on affordable price. Plot sizes in such colonies shall be maximum up to 125 square yards and their average size shall not exceed 100 sq. yard.

Under the policy, a maximum of five acres of land would be required to carve out an affordable colony in all the master plans of the state, except SAS Nagar and New
Chandigarh master plans, wherein any activity to set up a colony is only allowed to be undertaken as per the provisions of the approved master plans.

The policy proposes plotted, flatted and a mix of plotted and flatted development by the promoters.

It also envisages the maximum saleable area for the flats at 65 per cent of the total project, as against the existing 50 per cent, which would come as a major relief to builders.

Similarly, under the flatted development on roads of 40 to 80 feet and above, an FAR of 1:2 to 1:3 has been proposed. Parking norms for the dwelling units have also been relaxed.

As per a recent inventory, there are approximately 8,000 unauthorized colonies having about 40,000 acres of land, which have come up without permission from the competent authority in a haphazard manner and are devoid of basic facilities such as water supply, sewerage etc.

The mushrooming of unauthorized colonies has been found to be directly linked to non-availability of affordable housing for the lower and middle income groups, release said.

Meanwhile, Punjab cabinet also gave its nod to renaming the Department of Welfare of Scheduled Castes, Backward Classes and Minorities, as Department of Social Justice and Empowerment and Minorities'.

The decision to rename the department was taken as the existing name neither carried a positive connotation, nor truly reflected the efforts and endeavor of the government for upliftment of disadvantaged sections of the society, said an official release.

The Directorate of the concerned department has also been renamed accordingly as Directorate of Social Justice and Empowerment and Minorities.

Concurrently, the post of 'District Welfare Officer & Tehsil Welfare Officer' has been renamed as District Social Justice and Empowerment Officer &Tehsil Social Justice and Empowerment Officer.

The population of Punjab is 277.43 lakh, as per the census 2011, which comprises weaker sections of the society that include 31.94 per cent population of Scheduled Castes and about 16.1 percent of Backward Classes besides Christians, Muslims and other minorities.