Guideline Value or Fair Value of Land in Kerala

Registration department is one of the best sources of generating revenue to the state government of Kerala. That being the case, income generated from transfer of landed properties plays a significant role. Hence the importance of stamp duty and registration charges levied on transfer of landed properties.

Relevance of Fair value or Guideline value in Respect of Registration of Real Estate Properties

The document of title prepared in connection with transfer of properties should bear the required stamp duty in order to get it registered in terms of Kerala Stamp act,1959. Apart from the stamp duty, the Registration department will realise a registration fee for every transaction. Both these stamp duty and registration fee are levied at prescribed rates based on the value of land. This leads to the fact that the income derived by government  from the registration of real estate properties is dependent on the value of the said property.

As the stamp duty for registration of landed properties is decided in relation to the sale value of the properties, there was a tendency to fabricate the sale value. In other words,people used to show reduced sale value in the deed with an ulterior motive of reducing the stamp duty and registration fee. Going forward,this led to large chunk of loss of revenue to government. It was in this situation that the government introduced Fair Value/Guideline Value system whereby  the fair value of each and every property in the state is notified.

What is Guideline Value or Fair Value of Land in Kerala?

Fair Value of landed properties  is calculated per are and notified  by the Government  of Kerala. It is evaluated based on various factors viz; type of road, importance of plot, road access, nature of land etc. The registration of transfer of properties will not be allowed in case the sale value has  been shown in the deed as lower than the Fair Value fixed by government. This Fair Value which is also known as Guideline Value will be revised from time to time as and when there is marked increase in market value.

Categories of land for the purpose of Fair Value

The entire landed properties in Kerala have been classified  into 15 categories for the purpose of Fair Value calculation ,which are furnished below:

1. Commercially important plot

2. Residential plot with NH/PWD road access

3. Residential plot with Corporation/Municipal/Panchayat road access

4. Residential plot with private road access

5. Residential plot without vehicular access

6. Garden land with road access

7. Garden land without road access

8. Coastal(belt)

9. Water logged land

10. Rocky(land)

11. Waste( land)

12. Wet(land)

13. Hill Tract with road access

14. Hill  Tract without road access

15. Govt.property

How to find out the Fair Value/Guideline Value ?

The Fair Value of land in Kerala can be ascertained from the website of Kerala Government Department of Registration. The web address is as shown below:

www.igr.kerala.gov.in.

When  the image with the link ‘fair value of land’ is clicked, another window  will appear wherein you have to feed the relevant district, RDO, taluk, village and survey number or resurvey number. The Fair value/Guideline value of the property can be ascertained like this.

How to calculate the stamp duty and registration fee ?

Of course, the actual sale value of the property is the criterion for calculation of stamp duty and registration fee. But, on the other hand, it is mandatory that the sale value should not be less than the Guideline value/Fair value as has been notified by government.

Rate of Stamp Duty and Registration Fee

The rate of stamp duty has undergone changes from time to time. Before 2011 the rates of stamp duty for Panchayat, Municipal and Corporation areas were 7%, 8% and 9% respectively. But in the year 2011 a reduction of 2% was allowed in rates of stamp duty across the board with the result that it became 5%,6% and 7% respectively. Subsequently,a uniform rate of 6% stamp duty was introduced regardless of the jurisdiction in which the land in question is situated. This is the rate in force at present. Apart from this, a Registration Fee of 2% also will be realized.

In the case of partition of family property and gifting of land for immediate family members viz; spouse, children, brothers, sisters and grand children,the stamp duty has been fixed at Rs.1000.00 regardless of the value of land.(Though the state assembly of Kerala has approved this maximum limit of Rs.1000.00 as stamp duty necessary government order  is yet to come. However it is expected that the said order will come out shortly)

In such cases, for transactions among immediate family members,the registration fee is only 1% of the Fair value/guideline value without limit. Till recently, this was 1% of Fair value subject to maximum of Rs.25000.00

What is the present scenario of Fair Value?

Recently, the Fair value which had been prevalent  w.e.f.01.04.2010 was increased by 50% across the board, which was notified by a gazette notification No.SRO 698/2014 dt.14.11.2014. This increase has come into force on 18.11.2014. Naturally,there have been a lot of complaints against this increase in Fair value. Hence Kerala government decided to implement a new system whereby district collectors will be  delegated powers to fix fair price(The district Collector concerned has to take a decision within 60 days). Accordingly, government has decided to amend the Kerala Stamp (Fixation of Fair Value of Land) Rules,1995.

According to the new system, the person buying a property will be given an option of ‘Conditional Price Assessment’. In this connection, a new section, 28B shall be inserted in the Stamp Act to empower SROs to assess fair value of land conditionally. As per this, two third of the increased 50% stamp duty and registration fee will be realized and the registration allowed subject to the condition that the remaining one third of the increased portion is remitted by the person in the treasury. This one third portion will be refunded to the party concerned with interest provided the Dist.Collector, on perusal of the complaint, is convinced that the notified Fair Price is high.

 

Reference:Website of Registration department of Kerala government