UP Govt To Go Tough On Stamp Duty Evaders
The UP government is planning to crack the whip on buyers and builders over stamp-duty evasion. A panel set up by the state government has found that homebuyers are occupying 10,318 units in Noida where occupancy certificates have not been issued by the Noida Authority. On the other hand, residents of 4,482 units have not registered their property yet.
While it is mandatory to register your property under the Registration Act, 1908, without completing this process in a property deal, the legality of the transaction is not established- if is not possible to prove your ownership over the property in the absence of registration.
Similarly, a real estate developer must also offer possession of units to buyers only after receiving an occupancy certificate from the authority concerned. However, since a substantial amount of money is spent in paying stamp duty and registration charges, buyers often delay it. Some of them even go to the extent of evading. Under pressure from buyers to deliver, builders also often give possession of flats without an OC.
Since this amounts to authorities losing a great deal in revenue collection, the Uttar Pradesh government has decided to go after such evaders. When the state government starts cracking down on the offenders, buyers and developers in Noida would be the worst affected. Changes will be made in the UP Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, to impose stricter action against builders who offer possession of units without receiving OCs for projects.
Official data show the UP Stamps and Registration Department could recover Rs 650 crore if 14,800 flats in Noida are registered.
Do note here that buyers in Noida have to pay five percent of the property value as stamp duty while one per cent of the transaction cost is paid as registration charge. In other cases, developers are collecting money from buyers for property registration, but are not suing the amount for that purpose.
"We were getting a number of complaints that even after taking the money, the builders were not doing registry. We have got a letter in this regard from the Noida district magistrate. After its review, we found the customers were befooled as they could not get their properties registered," UP Stamp and Registration Minister Nand Gopal Gupta Nandi was quoted by PTI as saying in March.
First information reports were registered against several builders in February over evading stamp duty payment.