The realty developers in Ahmedabad are now heaving a sigh of relief after the state government offered a 50 per cent cut in the recently hiked jantri rates. The mood was upbeat among the realty and developer communities as the government relented on late Wednesday evening and offered to cut the recently hiked jantri rates by 50 per cent.
While realty was going through a tough time with many clients backing out from land deals due to jantri rates jumping by as high as 400 per cent in some cases, the recent cut may revive property deals scenario in the state once again.
Jateen M Gupta, managing director of JP Infrastructure Ltd., "It is a good gesture by the Government of Gujarat. While the hike in jantri rates was justified and expected by the builder community as the rates had not been revised in the past three years. But the earlier rates were way too high but post the cut it does feel that the hike was justified. "
The premium amount for conversion of new tenure land to old tenure land for agricultural purpose was 50 per cent on the jantri rates concerned. So the 50 per cent reduction means the amount will now be 25 per cent on the jantri rates.
Gujarat Institute of Housing and Estate developers (GIHED) president Suresh Patel says, "While the earlier jantri hike was sharp and impractical as they were much higher than the market prices even. The committee that was formed to look into the matter also found the hike unreasonable and the best way for the government to arrive at a compromise was to introduce a 50 per cent cut on the revised rate. This will directly benefit the middle class that was looking to invest in affordable housing with some respite on the hike on stamp duty prices. Secondly the smaller farmers which still form 30-40 per cent of agricultural landowners in Gujarat would have had to pay a steep price to the government simply for tenure conversion from new tenure land to old tenure land. Now they can breathe easy with having to pay only 25 per cent premium on agricultural land."
The recent move is a departure from the state government's earlier stand that it was not going to make any changes in the new jantri rates that were introduced from April 1, 2011.
More From This Section
Umang Thakkar, chief managing director of Dharmadev Infrastructure Private Limited says, "The new rates are definitely more reasonable and a welcome move is that of fixing the premium of jantri rates at 25 per cent instead of 50 per cent with regards to agricultural lands. As we deal in creating affordable housing schemes in the city this will bring a much needed revival to the realty market that had seen a slump in recent weeks due to the high jantri rates."
With revised rates the industry expects more transparency to prevail in the market. "This will definitely bring more transparency to the transactions between builders and landowners and developers can be rest assured that now they can get a single check for their land instead of the parallel currency that existed earlier. Banks are also giving more home loans so this transparency should take off the additional burden on home loan seekers as well. Also for those investors looking to sell their properties will have to pay fewer taxes on their profits garnered with this new revision," opines Sanjay Thakkar, chief managing director of Dev Group.