This has reference registration fee for flat in Kolkata

Our understanding registration to be done at 5 % (women applicant), 6% for Joint Applicant , 7 % for Male applicant, Agreement Value of the Flat for First Time Buyer.

In our case as Agreement value is 28 lacs , registration amount should be calculated over that.

However the current market valuation may be many times higher than agreement value.

Registration on market value should be applicable for 2nd timebuyers ,not 1st time buyers.

Now the builder is informing us the market value of flat is 1 cr. Hence registration + stamp duty : 10 lacs.

But this is a extremely high amount considering we have paid only 28 lacs.

Can anybody pls advise
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  • 1st time registration is on purchase agreement. Resale registration depends on circle rate.. (minimum value)..
    Consult a lawyer for local bye-laws.. In West Bengal.. anything can happens:(
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  • As new_indian suggested, pl consult lawyer. However, when I had gotten my flat registered, I remember having paid fees as per circle rate even though it was a purchase straight from builder. So, what new_indian suggested, if it is true, then I was certainly guiled...
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  • Is it possible that different rules apply in different places?
    For e.g Rules in Delhi is for 1st time buyer , while in Kolkata it is otherway.

    In delhi I have confirmed with builder that registration is on agreement value not circle rate. But Kolkata builder's opinion is as per circle rate ???

    Any Penal Code is there where this rule is clearly written such as Registration Act?
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  • The rule of thumb is highest of circle rate or agreement value, irrespective of first time or 10th time.

    There reason is very simple .... to avoid under declaration for win-win situation.
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  • hi all,

    i have a flat on sn roy road for which iv found a buyer thru a broker...nw the issue is coming in registration...the buyer wanted to pay around 50% of the valuation in cash...when he went to the registrar, the registrar quoted our actual deal value as the area rate and refused to register the property below tht rate...nw the buyer has told me tht he will look for another registrar who agrees to register it a lower rate...nw i hv the foll questions:

    1. is it possible tht for the same flat, diff registrars will quote diff rates? if yes, hw much cud the maximum variation be?
    2. i live in delhi n here the govt quoted area/circle rates are normally half of the actual rates. given tht in this case registrar has quoted the actual deal value as area rate, dies it mean tht i shud relook at my flat's actual value?
    3. what are the avg rates in sn roy road for a flat in a gated society with security? the place is 10 mins walk from ajantha cinema on the road opposite it...

    any advice will be highly appreciated..

    thx
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  • Originally Posted by chetani3
    hi all,

    i have a flat on sn roy road for which iv found a buyer thru a broker...nw the issue is coming in registration...the buyer wanted to pay around 50% of the valuation in cash...when he went to the registrar, the registrar quoted our actual deal value as the area rate and refused to register the property below tht rate...nw the buyer has told me tht he will look for another registrar who agrees to register it a lower rate...nw i hv the foll questions:

    1. is it possible tht for the same flat, diff registrars will quote diff rates? if yes, hw much cud the maximum variation be?
    2. i live in delhi n here the govt quoted area/circle rates are normally half of the actual rates. given tht in this case registrar has quoted the actual deal value as area rate, dies it mean tht i shud relook at my flat's actual value?
    3. what are the avg rates in sn roy road for a flat in a gated society with security? the place is 10 mins walk from ajantha cinema on the road opposite it...

    any advice will be highly appreciated..

    thx


    Are you sure you can register in a different place??? You are dealing in colored money, have you thought how you are going to manage that hard cash? 50% in color is too much!! You are helping someone to cheat the Government and yourself too!!


    Price on SN Roy road varies significantly, from 2600 to 4000+, depending on quality, location and maintenance.
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  • gharondabhai... Live example of Black Money in RE ...
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  • Originally Posted by sandipRC
    gharondabhai... Live example of Black Money in RE ...


    Is anyone actually unaware of this ?

    Black money is one of the primary reasons that RE prices are not falling in any place.. check out Kolkata Rajarhat example..Maybe I am in the minority here but prices in Rajarhat range from 3.5k - 5k psf) which is similar to outskirts of Bangalore .. whereas the job prospects / average earnings / salary levels in blr are way higher than Kolkata..
    So much private equity & coloured money is in the system that no one is willing to sell at the real levels
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  • Practical advice: Set a deadline with the prospective buyer...otherwise you will be locked in this deal till your buyer finds a "suitable" registrar.
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  • Originally Posted by AbhiCCU
    Is anyone actually unaware of this ?

    Black money is one of the primary reasons that RE prices are not falling in any place.. check out Kolkata Rajarhat example..Maybe I am in the minority here but prices in Rajarhat range from 3.5k - 5k psf) which is similar to outskirts of Bangalore .. whereas the job prospects / average earnings / salary levels in blr are way higher than Kolkata..
    So much private equity & coloured money is in the system that no one is willing to sell at the real levels


    Accepting the black money theory completely, we should also not neglect another hard fact. I was going through one of the interviews of Lalit Jain from Credai where he outlines the reasons for higher RE prices -

    1. Very slow approval process for new building plan sanctions by Govt agencies
    2. Huge demand supply gap as we stand today.
    3. Rising costs

    These three reasons (specially 1 &2) primarily don't allow developers to bring down the costs. In fact, the #2 above is further accentuated by #1 with time.

    In fact, he went on say that if #1 was solved by Govt, the developers would be able to bring down the costs by 25% straight. So, partly, our Govt should take the blame as well.
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  • Originally Posted by joydeepr1
    Accepting the black money theory completely, we should also not neglect another hard fact. I was going through one of the interviews of Lalit Jain from Credai where he outlines the reasons for higher RE prices -

    1. Very slow approval process for new building plan sanctions by Govt agencies
    2. Huge demand supply gap as we stand today.
    3. Rising costs

    These three reasons (specially 1 &2) primarily don't allow developers to bring down the costs. In fact, the #2 above is further accentuated by #1 with time.

    In fact, he went on say that if #1 was solved by Govt, the developers would be able to bring down the costs by 25% straight. So, partly, our Govt should take the blame as well.


    IMHO, point 2 is infact the opposite..From what I read in various articles, real estate unsold inventory is very high at the moment..Only demand is for LIG and some MIG projects thats all..
    There is a gap between supply available and demand there.. Most of the investments happening in the realty projects are by HNI's, Ultra HNI's, Private Equity and Real Estate Investment Trusts ( REIT's) run by Kotak, Citibank, Indiabulls, Piramal to name a few..and these folks hv a minimum IRR under which they will not sell other than at extra ordinary circumstances..
    Then there is the cheap loans these cos get from PSU banks due to political backing and which is easily rescheduled which does not force them to sell at real prices..
    But ofcourse the developers will not state this but say demand is very high just to keep the prices high..

    Is the govt approval process slow in every state ?? This is again another example of just passing the buck..
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  • Originally Posted by AbhiCCU
    IMHO, point 2 is infact the opposite..From what I read in various articles, real estate unsold inventory is very high at the moment..Only demand is for LIG and some MIG projects thats all..
    There is a gap between supply available and demand there.. Most of the investments happening in the realty projects are by HNI's, Ultra HNI's, Private Equity and Real Estate Investment Trusts ( REIT's) run by Kotak, Citibank, Indiabulls, Piramal to name a few..and these folks hv a minimum IRR under which they will not sell other than at extra ordinary circumstances..
    Then there is the cheap loans these cos get from PSU banks due to political backing and which is easily rescheduled which does not force them to sell at real prices..
    But ofcourse the developers will not state this but say demand is very high just to keep the prices high..

    Is the govt approval process slow in every state ?? This is again another example of just passing the buck..


    My friend, while accepting everything that you pointed out, I don't see how my point #2 is opposite to what you have explained so well. Let me dwell more on what I meant by "the gap is widening".

    1. LIG - Demand is more, but supply is less because developers aren't interested due to more land & raw material costs vs target lower sale price.

    2. HIG - Supply is more, but Demand is less because developers are more intested due to higher margins, but on the other side, due to higher home loan interest rates and big investments, buyers are very circumspect due to state of economy. At the same time, developers have proven ability to hold on.

    Although, both scenarios are different, a basic fact is still valid - GAP is only widening due to expectation mismatch and that's what my point was !!

    And, in such tight situations, the ones on lower scale of Value Chain take the brunt - people like you and me !! So, even LIG prices are slowly no longer remaining in true LIG range; actually transgressing into MIG and so on. With RE prices only going up, it is unfortunately the consumer that compromises on lower sqft area at high prices to keep budget constant.

    In another angle, new population entering the workforce each year, with aspirations of having a flat of his/her own, only adds pressure to WIDE GAP theory. The developers are reaping the benefits big time !!
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  • Originally Posted by joydeepr1

    These three reasons (specially 1 &2) primarily don't allow developers to bring down the costs.

    In fact, he went on say that if #1 was solved by Govt, the developers would be able to bring down the costs by 25% straight. So, partly, our Govt should take the blame as well.


    Developers can easily reduce their margins and sell at more acceptable prices.. and then they get cash to pay off the loans and reduce the interest burden .. we all know that RE cos all played the land bank strategy and over leveraged to a huge huge extent..
    From the info I get from folks who have built their own houses / are building houses in saltlake / rajarhat, for a very good construction quality price ranges from Rs 900 - Rs 1300 psft.. developers already charge anything between 20-30% super built .. and just imagine the cheap prices they got land in rajarhat etc .. but see the prices they launching projects there after having bought lands at rock bottom prices nearly 7-8 yrs ago.
    From what I read their margins are easily 40-50% but their profits are reduced NOT because of the current project costs, but because of them over-leveraging themselves and taking huge loans for land banks ..

    RE is one industry where the economics principle of demand and supply have failed to work mainly because of the nexus between developers and politicians wherein they are able to get and reschedule loans from PSU's at will.. If this nexus was not there, they would hv to generate cash and then pay the loans and would be willing to sell at reasonable profits..

    Indian economy is a place where gains are privatized and losses socialized ( eg.. Kingfisher, Unitech, DLF etcetc)..
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  • Originally Posted by AbhiCCU
    Developers can easily reduce their margins and sell at more acceptable prices.. and then they get cash to pay off the loans and reduce the interest burden .. we all know that RE cos all played the land bank strategy and over leveraged to a huge huge extent..
    From the info I get from folks who have built their own houses / are building houses in saltlake / rajarhat, for a very good construction quality price ranges from Rs 900 - Rs 1300 psft.. developers already charge anything between 20-30% super built .. and just imagine the cheap prices they got land in rajarhat etc .. but see the prices they launching projects there after having bought lands at rock bottom prices nearly 7-8 yrs ago.
    From what I read their margins are easily 40-50% but their profits are reduced NOT because of the current project costs, but because of them over-leveraging themselves and taking huge loans for land banks ..

    RE is one industry where the economics principle of demand and supply have failed to work mainly because of the nexus between developers and politicians wherein they are able to get and reschedule loans from PSU's at will.. If this nexus was not there, they would hv to generate cash and then pay the loans and would be willing to sell at reasonable profits..

    Indian economy is a place where gains are privatized and losses socialized ( eg.. Kingfisher, Unitech, DLF etcetc)..


    My friend, it is all about being an entrepreneur. Here, profits know no limits as it comes with truck load of risks, hard work, analysis and sometimes innovation.

    I am true 9-5 guy and have understood that all my life, I didn't create much value except feeding my family and keeping spare for my upcoming retirement.

    Having seen much less meritorious class mates turned entrepreneurs, I realized what they did was to create value for the society. Some are in RE, while some in Manufacturing etc etc.

    My point is - Imagine a barren piece of land in a wanderland and buying it with your hard-earned money and waiting for years in hope. When tides turn, you unlock its potential by creating a property for people like us to live. This is what I call generating value out of nothing and taking a truck load of risks along with patience, early-analysis skills etc etc.

    These people from entrepreneur class will always call the shots because they deserve to, by certain extent, in my eyes. While it is not wrong for them to charge a premium for everything they are doing, I acknowledge that some turn greedy too much too soon; and we should expose those elements. The examples of Unitech and KF are pointers to those greedy elements who have faced the brunt of shareholder mis-trust in recent times.

    Botomline - Be one of them, if you can't beat them !! They are certainly an enviable class.
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  • Ask any builder what the major cost heads and you will understand there are many big items. Ask them what is syndicate? Ultimately you pay for it.

    Then there are too many investors/middlemen at different stages of construction. Everyone is promised a return. Builder will never do a blunder to sell something cheaper than any of the investor's purchase price.

    Kolkata has an accute shortage of good quality residence options. You will be surprised that many projects are never advertised in Kolkata ... some are big project too. Good projects, good location flats are sold without much effort.

    A standalone building without any amenities/facilities in Laketown quotes 4000+, where as in 4000 you will get an excellently located flat with condo facilities. Kolkata is damn expensive if you look at the locality and amenities nearby.
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