Buying commercial properties just became costlier..

The State government has increased the registration charges for commercial properties in what appears to be a move to restrict the rapid increase in commercial space. The prices have skyrocketed especially in western Hyderabad. To purchase a commercial property admeasuring 1,500 sq.ft in the top floors of any IT or commercial complex, you will have to pay as much as Rs 20 lakh to the government in the form of various taxes.

For instance, a 1,500 sq.ft commercial property is now costing nearly Rs 1 crore in areas like Old Mumbai Highway, Nanakramguda, Guttala Begumpet, Miyapur-Bollaram Road, Manchirevula, Neknampur, and Narsingi. Against this Rs 1 crore, you have to pay 12 percent GST i.e. Rs 12 lakh. The registration charges are being levied at a market value of Rs 7,300 sq.ft, based on which one has to pay 7.5 per cent charges towards stamp duty and registration which would be around Rs 8 lakh. Thus, a commercial property costing Rs 1 crore in the market, would attract nearly Rs 20 lakh in taxes.

Government should rethink

The taxes levied against spaces of around 1,500 sq.ft even in the ground floor of commercial complexes in areas like Kondapur, Madhapur, Gachibowli, Hafeezpet, Khajaguda, Madinaguda, and Bandlanguda Jagir, too would burn your pockets. For those who are planning to purchase properties in upper floors in these areas, only the stamp duty and registration fee will cost up to Rs 5 lakh. Thus, purchasing commercial space has been declared as a costly affair by the government.

It may be noted that most investments on commercial spaces are made by NRIs and if the government decided to levy 20 per cent towards various taxes, it would definitely become a burden to them. These investors are likely to shift to alternate investment opportunities which in turn affect the commercial properties in the realty market. At a time when the neighbouring States are reducing stamp duty and registration fees, the Telangana government is increasing them. But one have to wait-and-watch to understand the implications of the State government’s decision on the realty market.