The construction industry in Tamil Nadu faces a major setback as the state government announces a sharp increase in registration fees and stamp duty. After experiencing slow growth in recent months, this unexpected move comes as a shock to developers and prospective buyers alike.
The registration fees for construction agreements have been hiked from 1% to 3%, significantly impacting development projects, such as apartments, villas, and gated communities, as well as individual homes under group development. Buyers seeking under-construction properties for lower rates during launch and reduced registration charges now face higher costs, potentially deterring investments.
Another concerning change is the increase in Power of Attorney (PoA) registration fees for non-family members, raised from Rs. 10,000 to 1% of the property’s market value. This poses a significant setback for those unable to conduct transactions directly and relying on PoAs. Executing joint ventures becomes impractical, as property values are determined later, making upfront payment challenging.
CREDAI in Coimbatore warns that even a 1% increase in registration fees and stamp duty could lead to a substantial rise in property prices, around Rs. 100 per square foot. The industry, already recovering from demonetization, GST implementation, and the Covid pandemic, faces additional hardships.
CREDAI Coimbatore urges the government to reconsider these increases, as they not only affect the construction industry but also the dreams of common people aspiring to own a home. With developers exploring alternative avenues for survival, the rollback of these fee hikes is crucial for the industry’s sustained growth and the interests of citizens seeking homeownership.
