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Registration charges to come down soon

M. Malleswara Rao

State goes by Sarma panel recommendations

HYDERABAD: Registration charges on transfer of property will come down from May 15.

The Registration & Stamps Department has decided to reduce the transfer duty to 2 per cent (against the present 5 per cent) and stamp duty to 7 per cent (8 per cent now). Collection charges will, however, remain untouched at 0.5 per cent. As a result, the registration charges will now be 9.5 per cent of the market value of the property against 13.5 per cent now.

Proposals made by the department to slash the registration charges have been cleared by the Revenue Minister, D. Prasada Rao, and a formal announcement is expected by the Government shortly after the Chief Minister, Y. S. Rajasekhara Reddy, gives his nod.

In deciding to cut the registration charges, the Government went by the recommendations of the E. A. S. Sarma Committee on administrative reforms which found the rates in the State `very high' vis--vis other States such as Tamil Nadu, and the national policy to reduce the registration charges. Sources said the reduction was also influenced by the World Bank, which felt that the registration rates in the State were "on the high side".

No relief for buyers?

The State exchequer stands to lose about Rs. 300 crores annually on account of this decision. The revenue earned by the department through registration charges reached an all-time high of Rs. 1883 crores during 2004-05. This represented an increase of Rs. 333 crores over the previous financial year. The department transfers the income from registration charges to the local bodies and retains only the 0.5 per cent collection charges.

This reduction in registration charges may not, however, provide a big relief to property buyers. It will be offset by the increase in the official market values of properties (land/buildings), which is due for the periodical revision. Under the present guidelines, these values will have to be increased by 10 per cent every year in the urban areas and once in two years for villages. The Government has not yet made up its mind on revising the market value.

Right now, surveys are underway by the Market Value Committees, which have builders also as members, to decide the quantum of increase in market value.

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