Govt’s double blow for aspiring property buyers

The Government of Telangana appears to have punched double blows to property buyers, with its decision to increase the stamp duty as well as registration values of lands. While people do not find anything wrong with the government’s move, they could not help but keep wondering what prevented the government from implementing slight increases in the past seven years rathern than hiking them at once.

There could be two strong reasons behind the government’s decision to keep the proposals to hike the registration value of lands and stamp duty. One is to avoid paying higher compensation to farmers for land acquision undertaken for construction of various projects. Another argument is to allow amassing black money taking advantage of the difference between market value and government registration value. It is speculated that many people from different parts of the country have invested in the real estate market of Hyderabad where the property prices were cheaper when compared to other metro cities in terms of both market value as well as registration value.

However, the government’s decision has certainly left the genuine buyers in trouble due to the increased financial burden. It may be reminded that most of the property buyers have postponed purchasing a flat or a plot, due to shortage of Rs 50,000 to Rs 1 lakh. In fact, many developers admit that people keep requesting them to consider decreasing such small amounts due to shortage of money in the last minute. Under these circumstances, the sudden spike in registration values as well as stamp duty could become a major financial burden for the common man.

Market observers are of the view that the government should have increased stamp duty and the registration values with a small gap, rather than imposing them together. They fear that this could prevent many prospective consumers to postpone their plans.