CREDAI to CM: Rollback registration fee hike, adopt Hyderabad model

CHENNAI

Developers have urged Chief Minister M K Stalin to reconsider the decision to hike registration fees and stamp duty and suggested the Hyderabad model of registrations.

Seeking rollback of registration fee for construction agreements, which has been raised from 1% to 3%, the Confederation of Real Estate Developers' Associations of India (CREDAI) has urged Stalin to revise the registration fee on conveyance. The registration fee has been changed from a fixed amount of `10,000 to 1% of market value. The apex body of the real estate industry wanted the fee to be from `30,000 to `50,000, ensuring alignment with current market conditions and fair valuation. 

Suggesting the adoption of the Hyderabad model for agreement of sale (AOS) and joint development agreement (JDA) cum general power of attorney (GPA) registrations, CREDAI said the model has proven to be highly effective in safeguarding the interests of all stakeholders. 

"By implementing this approach, the government can ensure earlier revenue collection while simultaneously providing protection to developers, private equity funds and banks against unpredictable behaviour of landlords or property owners," CREDAI said. 

This mutually beneficial arrangement not only streamlines registration process but also fosters a more transparent and secure real estate ecosystem. "We strongly urge your office to consider the implementation of the Hyderabad model as a strategic step toward ensuring the stability and growth of the real estate industry in Tamil Nadu," CREDAI added.

It also said the increase in registration fees and stamp duty will burden the industry and dampen its ability to recover and contribute to the state's growth trajectory. The increased fee will impose a considerable financial burden on home-buyers, ultimately leading to an additional expenditure of around `1 lakh for their property or flat.

Stating that even a 1% increase in registration fees and stamp duty can result in a substantial rise of approximately `100 per square foot in property prices, CREDAI said the revised rates will make multiple services, including mortgage cancellation receipt registration fees, considerably more expensive. 

Highlighting the increase in power of attorney charges for non-family members from a meagre `10,000 to one per cent of guideline value, CREDAI said it will not only add to the financial burden of developers but also discourage landowners from participating in such agreements. 

"The rise in costs may impact the purchasing power of general public, thereby hampering the overall growth of real estate industry. Hence, it would be vital to consider the potential impacts the fee hike will have on such projects and implement measures to ensure their viability and continued contribution to the housing sector in Tamil Nadu," CREDAI said.