Monday, December 12, 2016

Rapid revisions of 'jantri' likely

In a major move aimed at reducing the component of black money in property transactions, the Gujarat government is all set to reform its prevailing 'jantri' system to narrow the gap between the base price and market rate.

The 'jantri' rates will be revised on a yearly basis and kept in tandem with prevailing market rates. At present, there is a huge gap between jantri and market rates resulting in properties getting registered at rates just above 'jantri', eating into stamp duty and registration fee collections of the government.

The state government is studying the Maharashtra and Karnataka models which are meticulously revised every year to arrive at a rate as close as possible to the prevailing market rate.

Gujarat's 'jantri' rates were last revised in 2011 and these were based on outdated valuations of 2009. "Real estate in Gujarat was always a haven to park unaccounted wealth and we are trying to put an end to this in keeping with the nation-wide onslaught on black money," said a senior revenue official.

The other objective is to help common people get maximum loan amount sanctioned by banks for buying homes.

In Mumbai, the Maharashtra government has linked property transactions data with GIS maps. This allows them a real-time analysis of property transactions within a city survey number. This way, the revenue department arrives at a scientifically calculated average using satellite imagery.
Special factors like plots close to highways or main roads, which had the potential for commercial development, are considered.

The revenue official further added, "We are considering reduction in stamp duty and registration fees so that there is a greater disclosure of transaction values." Gujarat charges 5.9 % for registration and stamp duty which fetches around Rs 5000 crores annually.

"Real estate developers have been demanding a hike in 'jantri' rates for quite some time. The government's proposals would be very beneficial to the housing sector as well as government," said Dipak Patel, president, Ahmedabad chapter, Confederation of Real Estate Developers of India (CREDAI).

"Developers have no hassle with rapid revisions in 'jantri' rates. However, the state government should also reduce the charges levied on land conversion if it wants to ease the burden on genuine buyers," added Shekhar Patel, all-India treasurer of CREDAI.

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