The dream to own a home in the capital city is now going to be a costly affair as the Delhi Government has made up their mind to hike the registration fee for properties that fall in the bracket above Rs 50 lakh. According to this new rule, a home buyer will have to pay out 1 per cent of the cost of property as registration fee where as the earlier cap was of Rs 50,000 notwithstanding the price of the property. For example, if an individual is buying a property costing Rs 1 crore then he will have to pay Rs 1 lakh as registration fee, and likewise for a property of Rs 2 crores, one will have to pay Rs 2 lakh as registration fees.
Earlier, a minimal fee of Rs 100 was charged as a registration fee by the Delhi Government Authorities till year 1964. After 45 years, in the year 2010, the Delhi government introduced a ruling that differed between properties that costs Rs 50 lakh and more. The registration fees of conveyance deed, sale deed, gift deed etc. concerning to immovable property was hiked to be 1 per cent of the declared value of the property or the respective circle rate, whichever was higher, though, this was capped at Rs 50,000. But in case if the value of a property has not been declared then the registration fee will be Rs 1,000.
What this meant was that the properties that were priced below Rs. 50 lakh will be charged one per cent registration fee. On the other hand, for properties priced at Rs 50 lakh and more, a flat Rs 50,000 was charged as registration fee. This was sarcatic, as in first instance this meant that if one was falling under the more costly property bracket, one would in effect be charged with lower registration fee whereas if one was falling in the not so costly property bracket, one would be over burdened with 1 per cent as registration fee.
Property agents say that, “It is due to this cap that the registration fee was kept same for a property costing Rs 50 lakhs as well as a property costing Rs 1 crores or more”. On ground realities, it appeared unjust to a customer who buys a property costing Rs 50 lakhs and a customer buying a property costing Rs 5 crore would be paying the same amount of money as registration fee.
The Delhi Government apprehended this irregularity and resoluted to modify its ruling thereby doing away with the Rs 50,000 cap. With the cap no longer in existence, the registration fee for a property costing more than 50 lakh will be proportionally more.
One more reason that prompted the Delhi Government to reconsider the prevailing property registration law was its own state of apparently unending financial crisis. The city government is facing a financial crunch because of the over expenditure on the previous beautification and infrastructural development for the Commonwealth Games that were held in October 2010. Market Analysts firmly believe that this change will surely help the Delhi Government to generate more income from the property registration fee. The Delhi Government hopes to make an extra Rs 100 crores by waving of the upper limit in registration fees of the property.
The reassessment of the registration fees will also lend a hand in keeping a tab on the present undervaluation of properties in the city. The new property registration fee law will also be applicable for registration of documents including conveyance deeds, sale deeds, gift deeds, partition deeds and settlement deeds.
Blog at One Place 