Stamp duty on GPA registration in AP to be hiked to 5%It's the realty sector that is paying the price of the state governments desperate attempts at generating revenue, or so it seems. Despite the sector facing the worst drought ever, the state government has, over the past few months, levied innumerable taxes and fees on the industry hoping to bring in some revenue into its near empty coffers.
The latest in this series of duties is the proposal to hike the stamp duty on registration of general power of attorney (GPA) deeds and development-cum-GPA (DGPA) deeds along with gift and partition deeds. For GPA and DGPA, the registration fee is likely to jump from one per cent to as much as five per cent (of the property value), while in the other two cases, the revised fee would be three per cent as against the existing one. Worse, this five per cent, once imposed, would be the highest registration fee (on GPAs) charged by any state in India. This proposal, expected to be implemented within the next few days, has already led to widespread resentment among city realtors. They claim that these duties would add to their financial burden, especially at this time when their sales figures have touched an all time low. For the customer too this would come as a huge blow. It (GPA fee) will primarily hit NRI customers or those living in other cities in the country who usually hand over the power of attorney to some local relative/friend.
Five per cent of the property value is a lot of money and can even run into a few crores at times, said the managing director of one of Hyderabad's leading real estate companies adding, In the case of a DGPA, the onus is usually on the builder. With this amount going up drastically, the person will be forced to shell out a hefty amount for DGPA registration, besides spending a fortune to develop the property.
Only 20 days ago, the state government had introduced the composite value system for registration of properties, which had led to much outcry among developers and customers. As per this new rule, the registration fee of every property has been pre-fixed as per locality and is no longer computed on the basis of the land and structure value. This has led to a rise in registration rates in most areas and the government is expecting a minimum 20 per cent jump in revenue because of this, said a source from the registration department. For realtors, however, this has meant a rise in the final price of the property and a reduced number of takers for the expensive product.
If this was not enough, they are now left to battle this new GPA and DGPA registration fee hike. With this, the government has ensured that the sector does not bounce back to normalcy just yet, said Khaja Asif Ahmed, a city-based realtor adding, such unnecessary rise in duties would only lead to more irregularities with an increased number of people trying unlawful ways to evade registration fees and taxes. Ahmed even condemned the government's proposal to hike the registration fee on gift, partition deeds and said this is absolutely unfair. Such deeds are usually signed between close family members and are far and few in number. Then why unnecessarily hike the fee and cause inconvenience to residents In fact, even official records show that such deeds form less than one per cent of the total annual registrations, which is about 20 lakhs per annum.
However, government spokespersons argue that given the current situation, any money is good money for the state. The government's only objective is to generate revenue. I am sure it is hoping to make some money from such deeds and has, therefore, proposed a revision of rates, said Vishnuvardhan Raju, president, AP Sub-registrars Association.