The Gujarat government announced the doubling of jantri rates or the Annual Statement of Rates for immovable properties across the state with effect onwards Sunday. The jantri is a ready reckoner that determines market rates for properties. A resolution revising the rates was passed by the state revenue department Saturday.
After the revision, the existing jantri rates of Rs 100 per square metre will become Rs 200 per square metre. Additionally, the amount of Floor Space Index (FSI) and non-agricultural (NA) premium will double, thereby questioning the very viability of the project. In simple terms, FSI is the maximum permissible floor area, that a builder can build on a particular plot/piece of land. Experts believe that new projects will be costlier by 20% while the commercial sector will take the worst blow.
Revising the jantri rates after 12 years, a press statement from the Inspector General of Registration and superintendent of stamps read: “There has been a huge hike in the rates of immovable properties in the state because of the changing circumstances on account of rapid industrialisation, urban and rural development and economic activities. In order to give continued impetus to the state’s development and to give due market value to citizen’s properties, the jantri rates that were effective from April 18, 2011 have been doubled with effect from February 5, 2023.”
As such, the increase will impact upcoming projects. Real estate associations claimed that the government did not follow a scientific process in the jantri rate revision. The biggest adverse effect will be borne by the “affordable home” buyers.
Developers said they were wary of the realty market crashing not just in Ahmedabad but in other parts of the state also because the government did not give any time to call for suggestions and objections and implemented the sharp rate hike overnight.
CREDAI Ahmedabad GIHED president Tejas Joshi said: “The government increasing jantri by 100% is not such a problem, in fact it is a welcome step, but doing it in all the areas across Gujarat has not been well studied. In many areas in Ahmedabad itself, the new jantri is higher than the market price. This means that the homebuyer will have to pay more money for a house than its market price.”
The realtors’ fraternity expressed concern over buyers having to pay more money than the market price, especially in the affordable sector which accounts for 50%-70% of the overall residential market in Ahmedabad.
Such a steep hike will also increase stamp duty cost by double for buyers, not to mention the income tax burden on sellers.
President of NAREDCO Gujarat, Suresh Patel, added: “If a property is worth Rs 1 crore, a person earlier paid Rs 6 lakh on it as part of 6% stamp duty and registration charges. However, with the 100% increase in Jantri rate, the same property will be sold at Rs 2 crore. Hence, income tax liabilities on the seller will double.”
Patel also said that while developers welcome a jantri revision, the “unscientific process” undertaken without giving 60 days to note objections and suggestions was unacceptable.
CREDAI Ahmedabad called an urgent meeting of developers at its office on Sunday to decide on the further course of action.
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