New Guideline Values will be in effect from July 1st in Chennai. Property registration in Chennai will get costlier with the rise in the New Guideline Values. The Tamil Nadu government’s New Guideline Values will impact core areas and former corporations in places like Coimbatore, Trichy, Salem, Vellore, etc. The increase is by as much as 10% when compared to the ones set in March 2023.
2.19 lakh streets and 4.46 crore survey and subdivision numbers are covered under this revision. While Chennai and the old corporations can look up to significant increases, other areas will continue the same.
Examples of localities with New Guideline Values:
- Alandur Road: Rs 5,500/sqft to Rs 6,100/sqft
- Okkiyam-Thuraipakkam: Rs 6,000/sqft to Rs 6,600/sqft
- Abhiramapuram 3rd Street: Rs 16,000/sqft to Rs 17,600/sqft
Impact of New Guideline Values on Cost of Registration of Property:
Although property tax will remain the same, the New guideline values will push the registration fees to increase. Whenever there is a higher guideline value, it can result in property buyers having to pay more for registrations, since based on the guideline values the stamp duty (which is a purchase tax levied by the state government) registration fee is calculated. The builders are concerned that such additions might end up being transferred to customers through increased premium FSI (floor space index) fees.
Previously, the Madras High Court had invalidated an attempt by the government to increase guideline values by 33% in March 2023 for lack of proper procedure. After that, sub-committees were established by the government in each district to revise the values as per the 2010 TN Stamp Rules. This required gathering a lot of information and seeking public opinions and assent by the Central Valuation Committee. In the process there was a long drawn out operation consisting of:
- collecting statistics on real estate sales in several categories (agricultural, residential, commercial)
- Preparing draft guideline values
- Uploading the draft for public review and incorporating any feedback received.
- The updated new guideline values were implemented after taking suggestions and concerns into consideration
- The Central Valuation Committee approved the updated New Guideline Values on New Guideline Values in Effect: Up to 10% Increase for Chennai Real Estate
New Guideline Values will be in effect from July 1st in Chennai. Property registration in Chennai will get costlier with the rise in the New Guideline Values. The Tamil Nadu government’s New Guideline Values will have an impact on core areas and former corporations in places like Coimbatore, Trichy, Salem, Vellore, etc. The increase is by as much as ten percent when compared to the ones set in March 2023.
The Central Valuation Committee approved the updated New Guideline Values on June 29, 2024.
Industry Response:
CREDAI Chennai President, Mohamed Ali expressed gratitude for the registration department’s comprehensive investigation this time around. Conversely, builders expressed their dissatisfaction with the measures’ hasty implementation and they preferred a phased approach. Former Chennai Southern Builders Association president G Mohan noted variations in the application of the new values, particularly in areas like Alandur and Pallavaram where document registration became problematic. The registration department officials assured me that these issues would be resolved quickly.
In general, the rise in Chennai’s new guideline values is anticipated to affect the price of market prices as well as the costs associated with registering properties. It is significant to remember that most builders base their pricing on market rates, and that guideline values are usually lower than market values. Nonetheless, the guideline value hike directly led to an increase in the registration cost