In Chennai, the process of registering new apartments has stopped since December 2023. This issue started when the Tamil Nadu government introduced a new system for property registration in March, which combines the registration of land and the building into one document. Developers have noticed that this change has made the cost of registering a new home for buyers jump by more than 100% from March to December 2023.
The Confederation of Real Estate Developers’ Associations of India (CREDAI) is trying to work with the government to clear up confusion about this new property registration system. According to ANAROCK, a property consultancy, there’s been an 11% drop in apartment registrations in the third fiscal quarter of 2023, making it the lowest among India’s top seven cities.
The new system has changed from requiring two documents for registration to just one, but this has made it harder for buyers to book flats that are still being built. Because of these changes, developers can’t get the early funding they usually would from these pre-completion sales.
Moreover, without the ability to issue sale agreements under the new system, projects can’t be registered with the state’s Real Estate Regulatory Authority (RERA), which is meant to protect homebuyers and ensure projects are completed.
The changes have also made registration much more expensive. For properties up to Rs 50 lakh, the registration fee is now 6%; for those between Rs 50 lakh and Rs 3 crore, it’s 7%; and for properties over Rs 3 crore, the fee is 9%.
For example, in areas like Poonamallee, the cost to register a Rs 44 lakh property has gone from Rs 1.2 lakh to Rs 2.9 lakh. In Teynampet, registration costs have jumped by 148%.
Because of these higher costs and the new system’s complications, fewer people are closing deals on new homes. Developers are asking the government to lower the registration fees and allow legal documentation, like sale agreements, for registering projects that are under construction.
(Source: Moneycontrol)
Also read: Experts Optimistic about Impact of Gurugram Stretch of Dwarka Expressway