Bihar budget: Builders seek lower registration rate, amnesty for illegal flats

Several builders seemed to back the argument that a reduction in registration charges will encourage more registrations and reduce litigation for the government.

Ahead of the Bihar budget, builders and real estate players have demanded a reduction in registration charges on property sale deeds, increase in urbanisation and region-wise building bylaws to give fillip to construction activity in small towns in the state.

The real estate industry in Bihar has forwarded a set of demands for the Budget. (Parveen Kumar/HT File Photo)

In a presentation before deputy chief minister Tarkishore Prasad recently, builders and members of state CREDAI (Confederation of Real Estate Developers’ Association of India) put forth a slew of demands to seek incentives from the state government.

“Our main demand from the government is that registration cost of sale deeds of properties, especially apartments, should be lowered in urban areas as the rates are very high. Those purchasing flats have to pay 10% in registration cost and another 5% in GST, which amounts to 15% for legalising the documents and possession. In other states including Maharashtra and Uttar Pradesh, the registration cost is much lower, hovering around 3 -5%. Registration rate reduction will only add to the volume of registration,” said Manikant, state president, CREDAI.

Several builders seemed to back the argument that a reduction in registration charges will encourage more registrations and reduce litigation. “It’s in the interest of the state government to reduce registration charges so that more properties get legalised and litigations are reduced. Registration should not be seen as a medium of revenue alone,” said another builder, not wishing to be quoted.

In this fiscal year, the state registration department has earned ₹3,000 crore till January end as against the target of ₹4,500 crore. The shortfall is attributed to Covid, impact including economic contraction and an overall slump in the real estate sector.

The builders lobby is also demanding greater urbanisation in Bihar with region-wise building by-laws tailored to suit construction activity in cities like Muzaffarpur, Darbhanga, Purnia and Bhagalpur apart from other small towns.

They argue that existing building by-laws have strict specifications for construction like wide roads, drainage, sewerage among others which constraints projects in smaller cities.

“There should be region-wise building by-laws tailored to the infrastructure available in smaller cities so that parameters and specifications are less strict. This will help builders to take more projects in smaller cities and lead to higher urbanisation,” Manikant added.

The builders association has also sought an amnesty scheme for apartments facing action for violation of building by-laws. “There are a large number of apartments categorised as illegal because the builders violated by-laws in. But these buildings are already occupied and no water connection or roads is making them suffer. These constructions could be legalised through an amnesty scheme,” said Narendra Kumar, another builder who was in the meeting.

“We are hopeful that some incentives for builders will come in the state budget,” said Kumar.

The budget session of the state legislature will start from February 19 and the budget will be presented on February 22.