Final land fair value notification taking shape
The final notification of fair values of land in Kerala has been delayed. A look at what remains to be done before it is issued.
— Photo: H. Vibhu
Waiting: The State awaits the new fair value regime as the land prices have gone up sharply in cities such as Kochi and other places.
The colossal government effort to declare the fair values of land in the State has moved with considerable deliberation in its last lap.
Given the magnitude of the task, the delay in issuing the final fair- value notification seems expected. For long, this attempt to bring order to the land market had been considered impossible even.
When the draft notification was issued on May 5, the final notification was expected by July-end. However, rounds of deliberations over complaints and suggestions have taken time. Now, the notification is expected in early February.
Revenue Minister K.P. Rajendran says he expects it within a short time. Discussions with the District Collectors have been completed. A final meeting on the draft notification and the changes likely in the final order is scheduled in Thiruvananthapuram in November, he adds.
Officials from various departments, such as those of the Revenue and Registration, are on the job. The work does not face any stumbling block.
Fixing of land fair value has been necessitated by Section 28A of the Kerala Stamp Act, 1959, read with Rule 4 of the Kerala Stamp (Fixation of Fair Value of Land) Rules, 1995.
Village-level deliberations over the draft notification have seen complaints and suggestions pouring in, says a revenue official.
Thousands of queries have been answered, petitions addressed and face-to-face rounds with complainants completed.
The village officers have looked into the complaints and, in many cases, met the complainants, allowing them to air their grievances. In most cases, the suggestions were of undervaluation or overvaluation of property.
Each of these has been looked into to ensure that the final notification reflects the ground realities and is authentic. Whatever corrections could be made at the village level had been carried out and the corrected versions of the draft have been handed over to the revenue divisional officers.
The village officers have helped to eliminate duplication, included plots left out of the draft notification and corrected the draft on the basis of hearings and complaints. A village officer in Ernakulam says the draft has been thoroughly reviewed.
The most significant variation between the draft and the final notifications is expected to be the price. The final values are likely to be lower than those in the draft in many cases.
If the draft notification insisted on giving 80 per cent of the actual market value as the fair value, the final notification is likely to bring this down to about 50 per cent, it is learnt. The sub-registrars’ offices has been ordered to fix the fair value based on this consideration.
The other focus areas, such as classification of land, are expected to be as in the draft notification. Pieces of land have been divided into 15 categories and their prices fixed on the basis of the classification, based on variables such as access to road.
A revenue official notes that many complaints were based on individual perceptions or interests. For example, in some cases, complaints related to undervaluation of property likely to be taken over by the government for public projects.
Questions on relevance
The delay has led to some thinking on the relevance of the notification in the light of the changes in the land market.
The results of the global financial crisis triggered by the failure of the realty sector in the U.S. have had their impact on the real estate business in Kerala.
Though the builders have not pressed the panic button, they keep their fingers crossed. While sale of built-up area has been affected to some extent, land transactions have ground to a halt.
It is not immediately possible to say if land prices will fall, says George E. George of the Kerala Builders’ Forum.
But he feels that land prices have not fallen substantially. Given the State-specific conditions, it is difficult to imagine a significant drop, he adds.
If that happens, the relevance of the final fair value notification may be questioned because it is based on an understanding of the market realities before the financial crisis emerged full-blown.
In fact, the need for a fair value notification was felt more acutely then, as the land prices went up sharply and the transaction documents did not reflect the market realities.
The fair values will ensure that the government revenue will improve, though stamp duty rates will come down with the final notification.
A leading document writer here says an understanding has been reached on the market situation.
It will not be possible from now to register a property below the perceived market rates.
The notification will cause some difficulties to people who will inherit ancestral property.
Stamp duty at the rates fixed in the fair value list will have to be paid for registering inherited property, the document writer says.
Previously, inherited property could be registered on a stamp paper of Rs.1,000. Thus, partitions, settlements, transfer of ownership and so on will come under the new land rates.
There is no denying, however, that the final notification of fair value will bring about objectivity in the land market.
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