Chennai Flat Buyers To Pay 2% More!

People buying new apartments in the state will now have to pay 2% additional registration charges as the state has made registration of construction agreements signed between builders and buyers mandatory.

So far only the undivided share of land (UDS) was registered at sub-registrar offices, for which the government charges 5% stamp duty, 2% surcharge (for development of local bodies like corporations and panchayats) and 1% registration fees. Overall, for registration of a new apartment under construction, the buyer pays 8% of the value of UDS for registration. The construction agreement was never registered earlier.

Hereafter, the buyer will have to pay an additional 1% stamp duty and 1% registration fees on the cost of construction. Also, the construction agreement has to be registered at sub-registrar offices within 120 days of signing the agreement. Without a registered construction agreement, UDS will not be registered. Necessary amendments have been made to the Registration Act and the new rules came into effect on October 1.

Construction agreements signed till September 30 will not fall under the purview of the amended Act. However, developers and home buyers who claim exemption from the additional registration charges will have to provide proof before sub-registrars to show that their agreements were signed before October 1, said an official.

Confederation of Real Estate Developers’ Association of India (CREDAI) Tamil Nadu chapter president N Nandakumar said, “In terms of cost, there is an increase which customers have to bear. But there is a reward in the form of better title for their assets”. Till now, a registered deed used to be created for a new building only when resale of the property took place. A first buyer never used to get a title deed for his constructed immovable house in the state, unless the builder or the buyer insisted on registering the property after completion of the project. The only registered document one used to hold was the one for the UDS.