Cash crunch hits property registration in Noida and Greater Noida

Homebuyers do not have cash to execute registries of their properties

The Gautam Budh Nagar stamp and registration department has been failing to earn revenue since November 8, when demonetisation was announced, as homebuyers do not have cash to execute registries of their properties.

Homebuyers hit by the cash crunch have not been registering their properties as much, leading to a major drop in revenue for the stamp and registration department. (Sunil Ghosh/HT Photo)

Residents said banks and automated teller machines (ATMs) do not have adequate cash even after 28 days of demonetisation, hitting homebuyers who need the cash to pay for getting their properties registered.

“In November, we were given a revenue target of Rs156 crore, but we could earn only Rs60 crore. There was a 51% loss that month because of demonetisation. Property buyers, including homebuyers, are suffering as cash flow has not returned to normal yet,” said Sushil Kumar Singh, assistant inspector general (AIG), Gautam Budh Nagar.

According to officials, they have been given a revenue target of Rs160 crore, but as of now they have only collected Rs5 crore. Officials said before demonetisation they used to register 250-300 registries daily, getting Rs3-Rs5 crore in revenue in a single day.

“I do not think we will be able to meet our target for December either because registry execution has touched an all-time low,” said Singh.

The administration had on November 6 warned 25,000 homebuyers who had shifted into apartment complexes without executing their registries to do so before November 30 or face strict legal action. Builders who had allowed possession without registry were also issued notices.

However, after demonetisation, the department has decided to go easy on homebuyers who failed to get properties registered on time.

“Now, we are not forcing anyone to get registry of a flat or plot executed within any scheduled deadline because of the cash crisis they are facing,” said Singh.

Post demonetisation, property prices have fallen as there is no buyer available in market, officials said. To add to that, the circle rate (fixed price of a property at which the government charges fee) at which a property is registered is not at a par with market sentiment.

Explaining the problem, Tikam Chauhan, a real estate consultant, said, “To give an example, say a plot in Noida is available for Rs30,000 per square metre. But the government has fixed a circle rate of Rs35,000psm. That means a buyer needs to pay 5% of circle rate as fee. This is also affecting registry execution.”

However, the state government has no plans to address this issue. “We do not have any proposal to decrease circle rate,” said Singh.