Telangana government is reeling under a severe fund crunch after its revenue earnings took a drastic hit due to economic recession. The state has been exploring options to augments its earnings for the past six months. Two days ago, it brought into effect a steep hike in liquor prices to gather revenues through liquor sale.
Now, it has prepared the ground to increase the market value of lands across the state. It will be the first revision of market values of properties after the formation of Telangana in June 2014. The market values of lands were last revised in undivided AP in 2013.
The revision of market value of land will make property registrations costlier as property buyers will have to pay a higher stamp duty and registration fee. The registration fee and stamp duty are ascertained as per the market value of the land.
Official sources in the Stamps and Registration Department revealed that they had started the exercise to draft proposals. The latter is on the extent of the hike that should be done in the market values of land in rural and urban areas. They said that land values across the state had increased significantly since the last revision was made in August 2013.
Officials are examining the rate at which the market rates of lands have increased in the past six years. Sources said the issue of revising the market value of properties came up for discussion in the cabinet meeting held at Pragathi Bhavan recently. Chief Minister K Chandrasekhar Rao had reportedly asked officials to ensure that the market rates are revised scientifically without hitting real estate sector.
Officials were also asked to hold consultations with realtors before drafting the hike proposals. The government is planning to constitute a three-member committee for each district comprising of Joint Collectors, Deputy Registrars and Sub Collectors. These committees will recommend the extent of hike in market rates that the government will consider and give its nod.
The hike could be in the range of 10 per cent to 100 per cent. It depends on the gap between the government-prescribed market rate of land and the actual market rate existing at present.
In areas surrounding Hyderabad, the hike could be 100 per cent while in urban areas in districts it would be around 50 per cent and in rural areas about 25 per cent. The government is also planning to announce an attractive stamp duty scheme to ensure that the real estate sector is safe from higher registration and stamp duties.
At present, property buyers have to pay 6 per cent registration charges on the market value of land, which include 4 per cent stamp duty, 1.5 per cent transfer duty and 0.5 per cent registration fee. The increase in land market value will automatically increase property registration charges.