Home Urban Infrastructure News Realty News Buying property in Bengaluru comes with occupational hazard

    Buying property in Bengaluru comes with occupational hazard

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    Apartment blocks

    Apartment blocks measuring up to 5,000 sq ft, however, face no issues.

    The regulation, prospective in nature, says all properties measuring more than 5,000 sq ft should be part of the guidance value book before the registration process starts.

    It requires registration officials to ‘identify’ a housing project and include it in the guidance value book only if the developer possesses approved plans and commencement certificate.

    It will force builders and developers to comply with planning regulations. A flat can be registered only if the builder produces occupancy certificate.

    When a developer launches a project, a valuation team from the stamps and registration department visits it and assigns a guidance value (presumptive market value) on square metre basis.

    Such projects are added to the guidance value book, which is the basis for assessing stamp value in a sale transaction. There are, however, hundreds of apartment projects, measuring larger than 5,000 sqft in area that don’t figure in the book.

    “Two-thirds of properties in Bengaluru don’t have occupancy certificates. Secondary-sale transactions of these flats will run into issues. Only flats built by big developers have complied with plan regulations and have occupancy certificates,” the official said.

    The new regulation, which came into effect from January 1, requires owners of all such properties to go to the central valuation committee (CVC) at the stamps & registration department and get the property valued if they wish to sell their flats. “We are clueless how one state-level valuation committee will handle applications from the entire state. Won’t that lead to a pile-up?” a sub-registrar said.

    The previous method had an inbuilt solution, said officials.

    A subregistrar was required to fix valuation in “unidentified” projects by looking at the guidance value of wellknown projects in the vicinity and fix valuation using a discounting method. “A problem that we used to solve locally will now go before the statelevel committee,” the official said.

    Real estate developers body Credai has urged the government to review the regulation. Credai Bengaluru secretary Adarsh Narahari said occupancy certificates are traditionally issued by the BBMP, and there are several old apartments that may have had sanctions from authorities such as village panchayats who earlier did not issue OC.

    “The government needs to look at how they can control rampant deviations done in small sites in the city, which are developed as apartments illegally,” he said.

    New owners have to pay more stamp duty

    The new regulations of the stamps and registration department require sub-registrars to increase the stamp duty on flats coming up for registration, in line with the jump in guidance value.

    The regulation, that came into effect on January 1, requires registration officials to collect increased guidance value, even if the sale transaction was concluded months ago.

    Home buyers, in most cases, buy flats at lower prices during launch offers. The requirement that the buyer has to pay stamp duty not on the price paid but as per the guidance value may hurt home buyers. “After we fix the guidance value for a property under construction, we will increase the guidance value every year. By doing so, we will make the home buyer pay additional stamp duty and registration fee on an inflated value,” a sub-registrar explained.

    Credai Bengaluru called the new regulation as unfair to customers.

    Info- https://realty.economictimes.

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