Providing relief to thousands of homebuyers in Chennai, the registration department in Tamil Nadu has clarified that while registering an apartment, only the undivided share of the property will attract stamp duty and registration charges and not the built-up area.
The move comes in the wake of some sub-registrar offices demanding to register the built-up area along with the UDS of land, causing great hardship, mental agony besides making the allottees to incur huge and unnecessary expenses for the registration of built up area which is not approved by law.
With 4 percent registration fees and 7 percent stamp duty, Tamil Nadu charges one of the highest registration fees and stamp duties among Indian states. It is important to register the construction agreement along with the sale deed of undivided share in the state.
The inspector general of registration on May 11 issued an order that clarified that “If a document is presented for registration of (first) sale of undivided share of land only, the registering officers are hereby instructed not to demand or insist for inclusion of building in the subject matter of sale document for the sole reason that completion certificate has been issued by the competent authority to the project.”
Moneycontrol has a copy of the order.
However, it is also instructed that there is no impediment to register separate construction agreement as envisaged in the circular dated Oct 28, 2013.
A letter written by chief secretary to the state government to the inspector general of registration on March 18 had said that in respect of development of a large building or apartment complex, the proposed allottee, who envisages to acquire the apartment enters into an agreement of sale of UDS of land with the holder (vendor) of the land and a separate construction agreement with the builder/developer contractor for construction of apartment. Both these agreements are registered as per relevant provisions of law.
“For the building where the completion certificate has been obtained, the sub registrars are insisting that the conveyance deed or the sale deed for UDS in land should also include the sale of built up area. The completion certificate has nothing to do with the title of the land. It is settled law that what is conveyed only should be taken into account for registration purpose by citing the judgments delivered in the division bench of Madras High Court,” the letter said and sought a clarification.
The construction agreement is being registered under the provisions of the law with a stamp and registration fee of 2 percent on the agreement value, it had.
Suresh Krishn, the president-elect of the Confederation of Real Estate Developers' Association of India (Credai), told Moneycontrol that it was only a clarification. Tamil Nadu follows a dual agreement system as both land and buildings are registered separately with the concessionaire agreement.
“It has now been clarified that even for the first sale of any apartment, the undivided share and the apartment can be registered separately,” he said, adding this has put to rest all confusion on the matter.
“This comes in as a huge relief to homebuyers,” said Iyarappan B, General Secretary - Uniworld Chennai Owners Association.
“The buyer now gets to pay registration charges and stamp duty basis the undivided share and not the super built-up area. If the UDS is 500 sq ft, the buyer would have to pay registration fees basis that area and not 700 sq ft which is the super built-up area. Through this clarification the government has reinstated its earlier order,” he said.
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