ANOTHER BATTLE ON THE CARDS?
Owners cry foul as their applications for registration of apartments are put on hold for assessment of stamp duty – which is likely to be calculated as per current costs
There seems to be no end to the woes of apartment owners in the Commonwealth Games Village. After fighting a two-year legal battle with the Delhi Development Authority (DDA) and developer Emaar MGF for possession of the apartments, these high-profile buyers’ next big challenge is to get the title deed for their homes.
The joy of moving into their homes in the Village was short-lived when some owners were told that their applications for registration of the flats at the office of the sub-registrar VIII (Geeta Colony in East Delhi) had been put on hold.
“When I applied for registration almost 25 days ago, I was told that the sub-registrar would consult his seniors before moving ahead. A decision was pending on the money to be charged as stamp duty,” says a flat owner, requesting anonymity.
Sources in the revenue department confirm that the sub-registrar’s office had requested the office of the divisional commissioner to give its recommendations on the stamp duty to be charged. “When owners paid up 95% of the apartment cost in 2008-2009, the market rate then was R12,000 to R14,000 per square feet, while in May 2012, when the DDA held an auction of about 100 flats, the average rate was R22,000 to R24000 per sq ft,” says a revenue officer who does not want to be named.
“So, the cost of an apartment, which was bought for R3 crore in 2008, has now appreciated to almost R5 crore. If we calculate 6% stamp duty on the 2008 and 2012 prices, it comes to R18 lakh for R3 crore and R30 lakh for R5 cr. Since the difference is a whopping R12 lakh, the sub-registrar office’s has asked senior revenue department officials to take a final call,” the revenue officer adds.
The CWG flat owners and experts on matters of property registration argue that if the revenue department has already fixed different circle rates for different types of properties for stamp duty, it can’t employ a pick and choose method for the CWG apartments. The revenue department has nothing to do with the actual price appreciation in the real estate market, they say.
As per the Indian Stamp Act, 1899, for registering an apartment, stamp duty has to be paid on either the transaction cost (the price at which it was bought) or the current circle rate, whichever is higher. So, a 2,224 sq ft CWG flat, bought for R3.5 crore will be valued at R1.55 cr if the highest applicable circle rate is factored in (for a private developer’s apartment in Delhi it could come to about R7009 per sq ft). Here, as the transaction cost is higher than the circle rate, the sub- registrar should ideally levy 6% stamp duty on R3.5 crore.
Lawyer Sanjeev Gupta, an expert on registrations, says, “The sub-registrar has nothing to do with the price escalation of an apartment. If the flat cost comes out to be more than the circle rate – even by a rupee – then stamp duty will be levied on the transaction cost. A sub-registrar can’t calculate stamp duty on R6crore just because the market prices have escalated from the initial costs of R3.5 cr.”
The Village Buyers Welfare Association (VBWA) has decided to oppose any “unfair” move. Anoop Sharma, presidnet, VBWA says, “In all fairness and to bring justice to the helpless citizens who have been suffering for quite some time despite having invested in such a prestigious project, the flats must be registered at the purchase price at the earliest.”
Sharma is of the opinion that before the revenue department adopts a different yardstick to assess the stamp duty, it must factor in the payments for the apartments – which were made between mid- 2008 to late 2009, when the purchase price per sq ft was between R12000 to R14000, which appears to be significantly higher than the prevailing circle rates for private builder flats across Delhi.
“The flat buyers were given possession from May 2012 after a delay of more than one year – for no fault of theirs and also due to a dispute between DDA/Emaar as co-developers. Thus, the buyers have already suffered by paying huge EMIs,” Sharma says.
“It’s difficult to assess the market rate at the moment for these flats due to continued dispute on the issue of completion certificate for tower 5 and 15, low density of occupation, and no gas supply to the complex etc,” says another CWG flat owner.