Home sales in Chennai drop 30% following hikes in registration, other fees by the TN govt: CREDAI

Home sales in Chennai have a seen decline of 30 per cent as a result of the recent increase in registration fees and other charges by the Tamil Nadu government, said CREDAI (Confederation of Real Estate Developers’ Associations of India, Chennai).

The substantial hike in registration charges, which sent shockwaves through the real estate industry, had a big impact on buyers and sellers. CREDAI Chennai has been urging the government to roll back all the changes made in the last few months to reduce the burden of the homebuyers.

Impact of fee hike

“The 50 per cent increase in guideline values (GLV) earlier this year, the sharp registration fees in July and insistence of registering the entire apartment, not just the UDS leading to doubling or trebling of stamp duty costs have had undeniable impact on the market dynamics, resulting in about a 30 per cent decline in home sales said  Sivagurunathan, President, CREDAI Chennai. 

Typically, the registration-related fees and stamp duty for a ready ₹60-lakh apartment has gone up from about ₹2-2.5 lakh to about ₹5.5 lakh, and there are cases where the impact exceeds even ₹15 lakh.

As a result of the above, there were fewer registrations in July and August 2023.

‘Reconsider the scale’

This is the third hike in fees, duty and practice by the registration department in the last few months, including the increase in the guideline value and other services such as construction agreements and power of attorney. 

The decision to hike registration fees has left potential homebuyers facing increased costs and in some cases, uncertainty about their ability to purchase a home. This abrupt change has also caused concern among real estate professionals, who have been navigating a challenging market landscape.. 

The sudden dip in home sales has raised concerns about the broader economic repercussions, including potential job losses in the real estate and construction sectors, said Sivagurunathan.

“We urge policymakers to reconsider the scale of the registration fee increase and its impact on middle-class home buyers. We remain committed to working together to find a balance that supports government revenue goals while also maintaining a vibrant real estate market,” he added.