The Gujarat government had slashed the hike in jantri rates by 50%; yet the new jantri rates, it seems, are too high for people dealing in land. This is evident from the decline in the number of land sale deeds registered at the sub-registrar’s office.
Not only that, many land deals have fallen through because of the high jantri rates.
To give an example, Sanand, which has been in the news as the most happening place in the real estate market, has witnessed around 50% drop in registration of sale deeds.
Incidentally, real estate is alleged to be the preferred destination for black money. If sources in the city’s real estate sector are to be believed, huge amounts of black money change hands in most big land deals. Sources said the new jantri rates - which are apparently too high even after the 50% cut in the hike introduced earlier - have reduced the black money flow into the realty market. This, in turn, has reduced the number of deals and, hence, registration of sale deeds as well.
The sources said buyers are delaying sale deeds registration as they still find the high amount required to be paid as stamp duty, unacceptable.
This may appear strange as the delay in sale deeds registration is not going to benefit buyers anyway; yet people are sitting on the fence wondering whether a particular deal is worth the money involved.
Another reason for drop in sale deeds registration could be the capital gains tax that a seller has to pay. Under the new jantri rates, the value of land sold by its owner is much higher than under the old jantri rates, and it cannot be hidden. This forces sellers to pay higher capital gains tax which is calculated on the basis of the value of the land as per the prevailing jantri rates.
“This has resulted in the cancellation of many deals,” said a real estate broker in Ahmedabad. It has also created disputes in some cases where a seller, who has accepted money paid to him as advance, does a volte face and expresses his unwillingness to sell the land because he does not want to pay the high capital gains tax, the source said.
In Sanand, the new jantri rates are five times higher than the old jantri rates, even after the revenue department slashed the hike by 50%. The state government recently paid a whopping Rs28 lakh for a bigha of land acquired for the Gujarat Industrial Development Corporation (GIDC).
The new jantri rates are still on the higher side, said sources at the sub-registrar's office in Sanand. They said the sales deed registration had dropped by around 50% in this realty hotspot.
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