The Gujarat government’s decision to double the jantri or the annual statement of rates (ASR) for immovable properties in the state has had a Domino Effect on the real estate market. Reports claim that land deals to the tune of Rs 2,000 crore in Ahmedabad have been put on hold. These deals were in the pipeline since December.
Developers, who bought land for projects based on the then prevailing market rates, are now in a Catch-22 situation. The escalating cost of purchased FSI and the implications of capital tax have caused a major stagnation in the property market. The situation, according to experts, will result in a longer tenure of payment terms.
Developers shell out 40% of the jantri value to purchase FSI. The 100% increase in jantri has doubled the cost. According to a certain section of the media, buyers and sellers have been convening meetings to arrive at a solution.
Tejas Joshi, president of CREDAI Ahmedabad, was quoted as saying, “There are a number of issues arising in farmer-farmer, farmer-developer and landowner-developer deals. Farmers do not sign registered agreements to sell (banakhats) till they receive the entire sum, so many deals where big farmers bought land from smaller farmers are stuck.
“They are facing issues relating to capital gains tax and income tax liabilities. On the other hand, developers find it difficult to pay the higher price for FSI. This issue is affecting even small farmers and we are demanding relief from the state government.”
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