The cost of all types of real-estate properties in Gujarat is expected to rise by 15-20 per cent on an “immediate basis” as the newly announced jantri rates (ready reckoner or circle rates) are effective Saturday, say experts.
The Gujarat government made concessions and reduced the jantri rates by as much as 25% on Friday in response to pressure from the real estate industry.
The government had doubled the rates almost two months earlier, but due to pressure from the influential developer lobby, the implementation date was delayed until April 15. The stamp duty and registration fees levied by the Gujarat government when a property is purchased are based on the jantri rate, which is typically less than the current market rate of any property.
“As the jantri rates for built-up properties have been raised by 1.5 times (compared to the earlier rates), there will be an immediate increase of 15-20 per cent in the sale prices of all properties, be it residential or commercial,” said Ajay Patel, chairman of CREDAI-Gujarat, a body of real-estate developers in the state.
The jantri applicable to various types of constructions will be 1.5 times, according to the new rates announced by the state government on Thursday. This represents a 25% reduction from the hike compared to the “doubling” announcement made in February. As previously announced, the rates for both agricultural and non-agricultural land will double.
Similar to this, the composite rate—applicable jointly for land and construction—has remained the same for shops but will increase by 1.5x (75%) for offices and 1.8x (80%) for residential properties in the state instead of the 2x increase that was previously announced.
In February, the Gujarat government had raised the jantri rates after a gap of 11 years and had tried to bring the base rates at par with the existing market rates. However, with real-estate developers protesting, the government deferred the implementation of the new jantri rates from the first week of February to April 15 to give time to developers to wrap up the ongoing land and property deals.
According to the new jantri rates, the charges for paid FSI (Floor Space Index) that developers can buy and the premium for converting agricultural land into non-agricultural land has also been reduced by the government. The premium charged for converting agricultural land to non-agricultural—a mandatory process for using the land for any non-agricultural purpose—has been reduced to 30 per cent from the earlier 40 per cent.
Similarly, the paid FSI for affordable housing projects is being charged at 5 per cent for housing units measuring 50 square metres or less, 10 per cent for units between 50-66 square metres and 20 per cent for units that are 66-90 square metres in size. “Earlier, the paid FSI for affordable housing was 40 per cent of the prevailing jantri rate,” Ajay Patel from CREDAI said.
The chargeable FSI for tall buildings has been reduced from 50% to 40%, and the FSI for residential zones R1 and R2 as well as transit-oriented zones (BRTS and Metro corridors) has been reduced from 40% of the jantri to 30%.Welcoming the government decision, CREDAI Ahmedabad president Tejas Joshi said the prices of properties would rise on an “immediate basis” with charges of paid FSI rising for the developers.