The Government of Telangana announced last week that it is considering a hike of property registration charges which would come into effect from 1st February 2022 if the govt. passes the motion. Representatives of Telangana’s real-estate market – developers & builders mainly appealed to the state govt. on Thursday to ask the govt. to defer its plan to increase property registration charges to a later date instead of the proposed date of 1st February 2022.
The Telangana govt. reportedly plans to increase the currently existing property registration charges by anywhere between 20-50% based on the nature of property. The govt. of Telangana was set to make the decision this week and implement the new property registration charges from 1st February 2022 onwards. The state govt. of Telangana had increased the property registration charges quite recently – 1st July 2021 onwards and has recently also increased the stamp duty from 6% to 7.5%. The plan of increasing property registration charges will mean property registration charges for different types of property will be increased at different rates.
Confederation of Real Estate Developers’ Association of India, Telangana (CREDAI, Telangana) President P. Ramakrishna Rao has said that 2 hikes in property registration charges in such a short period will be tough for the real-estate market to bear, especially dur to the prevalent Covid-19 pandemic. He hoped the state govt. reconsiders its decision and postpones it to be introduced when the real-estate market is stable & has recovered from the slowdowns caused by the pandemic. He added that with most realty-related offices being affected by the 3rd wave of Covid-19 in India, many transactions have remained incomplete.
CREDAI officials have also stated that the govt. increasing property registration charges will only add to a long list of worries the developers are currently experiencing as the cost of construction raw material, especially steel has increased drastically. The added burden of higher raw material prices and the increase in property registration charges would mean developers will be faced with a tight budget and the speed of construction will slow down considerably. The current price of steel is around ₹65,000 per tonne and has increased by more than ₹5,000 per tonne in the last 5 weeks.
The concerns of the real-estate builders/developers echoed those expressed by CREDAI Telangana and members of the Telangana Real Estate Developers Association (TREDA) made the appeal to the state govt. on behalf of all the developers in the state. The president of TREDA R. Chalapathi Rao has said that if the property registration charges are increased, the market value of properties will increase by 100% and become double suddenly which is not fair to the buyers & could cause an industrial collapse. He added that real-estate developers would not have objected this move had it not been for the earlier revisions of fees – increase in stamp duty charges, land conversion tax.
Real-estate experts believe that the combination of increased property registration charges, stamp duties, increasing raw material costs, Un-divided Land Share (UDS) issues and Covid-19 impact will affect the real-estate sector quite severely if the charges are revised again.