A 33% reduction in the market guideline estimate price for buying a plot/land has been announced effective from today (Friday, 9th June).
This step has been hugely welcomed by the construction organisations. However, they are disappointed on another aspect that the registration charges have gone up.
The state president of the house/multi-storeyed building contractors association federation explained that as the market guideline estimate price is reduced, the registration charges have gone up. In many places, the guideline estimate rice was much higher that the prevailing market rates.
The increase in registration charges will earn more revenue for the state government. So, it is welcome. However, it must also be noted that there will not be any major benefit for the plot/land buyers.
An official explained that the 33% reduction announced in the guideline estimate price for a plot/land is a welcome feature. However, in order to offset this revenue loss, it was unexpected that the registration and stamp charges were increased from 8% to 11%. So, this measure will be of no major benefit to the buyers. If this increase had been avoided, there would have been a good benefit for the buyers.
Another official explained that the 33% reduction announced in the guideline estimate price for a plot/land is a welcome feature. The prices of houses and residential flats will come down. Real Estate industry will grow. When the prevailing guideline estimate prices were higher at Rs. 15000 per sq ft, the registration charges were set at 1% and the stamp charges were set at 7%. The buyers paid Rs. 1200 per sq ft at that time and registered. With the reduction in the guideline estimate price, the price of the land also reduces to Rs. 10000. At the same time, if the stamping and registration charges are taken at 11%, the land value will become Rs. 11000.
The above is not a major change. However, when the guideline estimate prices were higher, a 1000 sq ft land sold at Rs. 1.5 Crores. After the guideline estimate price has gone down, the same land will be sold at Rs. 1 Crore. When the price of the land goes down, the price of the flats/houses constructed on these lands will also come down. So, in an overall consideration, the above revisions are beneficial.