New collector rates from Aug; 25% hike in urban areas, 15% in rural ones `RATIONALISING STAMP DUTY NEED OF HOUR’
Getting a property registered in the city will soon become expensive as Chandigarh administration has decided to increase the collector rates in the city with effect from August 1.
There will be 25% increase in urban areas and 15% in rural areas.
Lat year, the collector rates in the UT had gone up by 25% in rural areas and by 60% in urban areas; the increase then had come after three years.
With this, getting a property sale deed registered will be expensive in terms of the stamp duty charged in case of a sale or purchase of property.
According to officials, low collector rates were leading to stamp duty evasion and the administration had been losing out lakhs, as these rates were much lower than the existing market prices. However, property dealers say though it will add to the revenue of the administration, it will not check evasion of stamp duty.
Collector rates are the rates fixed by the administration for different types and sizes of properties residential, commercial and agricultural.
Administration sources said it had been felt that despite the revision last year, the rates were too low and hence a need to bring changes in the minimum rates was felt.
The administration has fixed these rates depending on the areas, like these rates are the highest in places like Sector 17, Madhya Marg, some areas of Sectors 35 and 22 in case of commercial areas.
Experts feel it will bring about a change in property prices as well, besides a high increase in the earnings of the administration.
HOW IT WILL IMPACT PROPERTY PRICES If the rates are hiked by 25% on the existing collector rates (Rs 39,936 per sq yd) in case of residential area, the rate for residential property will be calculated at the rate of Rs 50,000 per sq yd. That means a 250yard (10-marla) plot will be calculated as 250 x 50,000, that is Rs 1.25 crore. A stamp duty of 5% will be charged on this rate. With the prevailing market rate of a 10-marla plot being somewhere between Rs 4.75 crore and Rs 5 crore, a minimum amount of Rs 3.5 crore is transacted underhand in a single transaction, incurring huge loss to the direct taxes kitty and piling up of black money, said RP Malhotra, general secretary of Property Owners Welfare Association. This is a twoway problem. If on the one hand, the buyer insists on sale deed registration on minimum fixed collector rates to save on stamp duty and saving on tax-paid money, the seller, on the other hand, prefers to have minimum possible money to save on capital gain tax. He says the need of the hour is to rationalise the stamp duty at 0.5%.
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