byREVIEW MY PROP
JULY 24, 2020
BENGALURU: More than 60 per cent of the 240 sub-registrar offices in Karnataka have failed to meet the revenue target set for the first seven months of the current financial year, indicating a continuing downtrend in the real estate sector.
Responding to this, the government, in the last week of November, wrote to 146 sub-registrar offices, which together reported a deficit of 17% for the period between April 1, 2019 and October 31, 2019.
Someshwar Reddy, immediate past chairman (Karnataka), Builders Association of India (BAI), said, “A combination of factors from demonetisation to inflation, economic slowdown to lack of price correction in the market and from a stagnant job market to high tax rates, everything has had an impact on sales and this is reflecting on registrations in the state.”
Among the 146 sub-registrar offices, 33 are in Bengaluru Urban district, four in Bengaluru Rural and 13 in Mysuru. Of these offices that have not met the 100% revenue target, some have a deficit of less than 1%, such as Shivajinagar, while some others like Doddaballapura have a 35% deficit.
In its letter, the stamps and registration department raised concerns about undervaluation of properties.
“It has been ordered that sub-registrars, as per rules, ensure they collect the money lost because of undervaluation and/or because of wrong classification of documents,” reads the letter, of which TOI has a copy.
Explaining how wrong classification of documents could hurt the exchequer, an official said, “For instance, if a commercial property document is by mistake classified as residential, the duties to be paid will vary.”
But realtors said no rampant undervaluation of properties was happening. “If at all, from what we have seen, there is some undervaluation, it happens in independent properties when officials collude with the owner. But those volumes aren’t big enough to hurt. When we speak of big projects, there is no question of undervaluation given the nature of business,” one of them said.
JC Sharma, vice-chairman and MD, Sobha Limited, said, “There is no denying that there’s a general apprehension in the market, which has seen a lull in purchases being made, and this may have affected the government’s revenue.”
Both realtors and officials agreed there could also be an impact of the Real Estate Regulatory Authority being in place. “I don’t say this in a negative way, but there has been an impact on small developers who used to work by rotating cash from one project to another. Now, they are scared to register a property for sale before the construction has neared completion, unlike earlier,” one of them said.