West Bengal government rationalizes property valuations
Year 2014 can be a happy year for the real estate buyers and sellers in Kolkata and its outskirts owing to the correction of the valuation of built-up space for residential as well as for offices by the finance department of West Bengal, the Confederation of Real Estate Developers' Association of India's (CREDAI) Bengal chapter said on Friday.
Rationalization of property valuations by bringing in the circle rates to realistic market levels comes as a welcome relief to real estate buyers and sellers in many parts of the city.
This, according to CREDAI Bengal, is spread across the city which includes Behala, Thakurpukur, Kolkata Main, Laketown, Madhyamgram, Garia,, Narendrapur, and district locations like Barasat, Konnagar, Rishra.
The IT and ITes industry will benefit immensely with the valuation of office space in Sector V coming down to the market-reflective average of Rs 4500 per sq. ft. from the very high Rs 8000.
Vice president of CREDAI Bengal, Sushil Mohta said,"The revival of IT and ITes industry is crucial to the state economy. We are delighted that the government has acted swiftly in order to mitigate the difficulties of the IT and the ITes office space segment, especially in Salt Sector V region which have long suffered in terms of transactions."
Expressing his satisfaction on the government action, Harsh Vardhan Patodia, president, CREDAI Bengal said,"This is extremely significant, considering that it was crucial to infuse a positive sentiment in the market to support the home owning aspiration of millions of buyers, especially in the LIG and MIG category."
The key issue in property transaction arose with the difference in valuation of properties by the registration authorities and the actual market value and the subsequent impact on stamp duty.
CREDAI president attributes the stark difference to frequent property valuation done by the authorities, " Official value of properties in many areas had gone as high as 70%/80%/90% higher than the market value as valuation exercise was carried twice or thrice a year."
The woes of the end users heightened with the introduction of section 43CA and the amendment of 56(2)vii of the Income Tax Act by the Finance Act, 2013, which levied a 32% additional income tax on differential amount between the valuation by the registration authority and the actual value of the transaction, considering this to be a notional income.
However, an upward revision of property valuation in Ballygunge, Alipore and areas under ward 360 in Kolkata has been suggested by CREDAI, where the valuation figures were found to be lower than actual market rates.
(Posted on 26-01-2014)