Registration rates hiked

Prices of land and apartments have increased by 10 per cent to 30 per cent following the government’s decision to raise registration charges. The new rates came into effect from August 1. This will fetch the state exchequer Rs 230 crore. The government has also formulated a plan to raise another Rs 31 crore by rectifying anomalies in the existing market values. However, builders have complained that the new rates would lead to a slowdown in the sector. The government earned only Rs 22.25 crore through registration of properties in the city and its outskirts in April-May 2008 as against the target of Rs 33 crore.

Officials felt that unless market values were revised, the government will not be able to achieve the statewide revenue target of Rs 5,050 crore this year. Last year, the target was Rs 4,800 crore but earnings fell short by Rs 1,000 crore. Registration charges are usually revised twice every year in February and August. This time, the government has not spared even under construction apartments. It also fixed different charges for commercial and residential properties in same locality. In Hyderabad, for instance, commercial and residential complexes in Banjara Hills, Jubilee Hills and Begumpet have to pay different registration charges.

In Banjara Hills, registration charges per square yard for commercial purposes were Rs 53,000, which have now been increased to Rs 60,000. For residential buildings in the same area, the charges have been raised from Rs 30,000 to Rs 32,000. In Begumpet, the registration charges increased from Rs 38,000 to Rs 45,000 per square yard and in Narayanguda, they have touched Rs 24,000 from the earlier Rs 22,000.
In Venkateshwara colony/Journalists Colony, the charges increased from Rs 30,000 to Rs 32,000 and in Qutbullapur, the charges increased from Rs 3,500 to Rs 5,000 for commercial structures. In Shamshabad, in areas far from the airport, the registration charges were increased from Rs 1,800 to Rs 2,000 for residential purposes and Rs 6,000 to Rs 7,000 for commercial purposes.

In Hyderabad, construction charges for apartments on ground floors and first and second floors were raised from Rs 540 per sq. feet to Rs 550 per sq. feet. For those above the third floor, the charges were raised from Rs 580 to Rs 600. This will be in addition to registration charges. Registration charges in suburbs which fall in Ranga Reddy limits were also raised by 15 per cent. In areas such as Kukatpally and Hitech city, the government has decided to restrict the increase to 100 per cent. Builders in the city have urged the government to roll back the increase as they will put additional burden on buyers, who are bearing the increased home loan interest rates.

“The cost of land has gone up substantially and it has also led to a subsequent hike in service tax and VAT.” Says Mr Anand Reddy, managing director of PBEL Property Development (India) Ltd, a multi-national construction firm. “The buyer of a building ends up paying more towards taxes than registration charges.” Other builders said the cumulative effect of the hike in interest rate on housing loans, service tax and VAT would drive away middle class buyers and lead to the collapse of the construction industry.
“Even financial institutions extending loans for building have begun to charge heavy interest rates,” Mr K. Ravinder Reddy, chairman and managing director of Janapriya Engineers Syndicate says.