KOLKATA: The finance department of the West Bengal government has corrected the valuation of built-up space in certain localities of the city and its periphery for residential sector as well as for offices in Sector V of Salt Lake.
Sector V apart, CREDAI Bengal is in talks with the finance department to standardize prices of commercial and office space in the city by the end of the current fiscal.
This is a welcome move for both buyers and sellers and will encourage real estate investment in the city.
The trigger to the move which is a longstanding issue in property transactions, is a notable difference in the circle price of a property and the price at which it was sold.
This impacted the stamp duty paid by the buyer at the time of registration. "The declared circle rate (for valuations) is much higher in the state and in some cases it went up to 25 per cent to 100 per cent of transaction," said Harsh Vardha Patodia, President CREDAI Bengal.
This apart, introduction of new provisions of Section 43CA and 56(2)vii of the Income Tax Act where a 32 per cent additional income tax was being charged on the differential amount between the valuation by the Registration Authority and the actual value of the transaction, considering this to be as notional income. There has been a reduction of approximately 40 per cent in office space price at Sector V Salt Lake.
The circle price of Rs 8000/sq ft has been brought down to Rs 4500/sq ft. "Before the rationalisation, the industry was also suffering because of high stamp values transactions were not happening as both buyers and sellers were affected because of the central law," said Sushil Mohta, vice president, CREDAI. Pending deals are being closed already especially at Salt Lake Sector V region that have been suffering in terms of transactions.
"There were buyers who were shying away from investing in Sector V properties because they would end up paying more revenue unnecessarily, the standardisation has sorted such issues and pending deals have started closing. There could be an approximate boost of 15 per cent in investments made in the city both in terms of residential and commercial/office space investments," Mohta added.
Among residential areas there has also been decrease of price at Christopher Road from Rs 6000/sq ft to Rs 5300/sq ft. Escalation in prices have happened for areas like Ballygunge. The circle price of the area was close to Rs 8000 and has been raised to Rs 12000.