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BBMP's rush to implement e-khata service has hit property registrations, caused 'distress' to buyers: CREDAI Bengaluru
Credai Bengaluru has said that BBMP's rush to implement the e-khata service has impacted buyers who are in the process of getting their documents registered
Bengaluru’s municipal corporation, Bruhat Bengaluru Mahanagara Palike's rush to implement the e-khata service has caused ‘significant distress’ to people who are in the process of getting their property documents registered and impacted registration of properties worth ₹8000 crore, Bengaluru developer body Confederation of Real Estate Developers' Associations of India (CREDAI) has said.
E-khata is an electronic version of the traditional khata certificate, introduced by the BBMP in Bengaluru and other local bodies in October. This digital record is available through an online portal, where property owners can apply for, download, and verify their khata without visiting the municipal office.
Flagging concerns over the e-khata service, Amar Mysore, president, CREDAI Bengaluru, has said that the government should have implemented the e-khata service in a phased manner.
“The sudden implementation of the service has led to an almost 60% dip in the city's property registration. Registration of properties worth ₹8000 crore has been delayed since October,” he told HT.com.
Read more: Draft e-khatas of all Bengaluru properties released online, says BBMP. Here's how to secure your final e-khata
“The overflow of applications from the general public has caused significant distress to people who are in the process of getting their documents registered,” he said.
"The government has taken a step in the right direction to digitize the real estate records. However, the sudden implementation of mandatory e-khata has resulted in a rush of applications and subsequent overflow of applications. This has also led to a significant delay in completing property registration in the city," Mysore told HT.com.
“The sector has been facing challenges due to the sudden mandatory implementation of the e-khata service,” he added.
Mysore said CREDAI Bengaluru has submitted a letter outlining critical issues facing the real estate sector, primarily concerning e-khata, to Krishna Byre Gowda, Revenue Minister, Karnataka. The same document was also submitted to Munish Moudgil, Special Commissioner (Revenue), BBMP.
He also said that preference should be given to new property buyers and sellers.
Read More: Bengaluru residential property registration falls 8% y-o-y between July-September 2024 to 25,259 housing units
Implement e-khata phase-wise: Credai
Mysore added that the current process of uploading documents for E-khata and the document verification process adopted by BBMP is time-consuming and cumbersome, effectively delaying the registration process of various documents.
CREDAI Bengaluru has urged for the implementation of e-khatas in a phased manner to ensure smooth operations as all e-khatas across Bengaluru urban limits are still in the process of being updated/uploaded in the E-Aasthi portal.
Additionally, CREDAI Bengaluru recommended streamlining the uploading process by introducing a user-friendly interface that allows users to upload the requisite documents to complete the e-procedure.
To address these issues, CREDAI Bengaluru suggested streamlining the issuance of the e-khata document, enhancing portal capabilities for multiple transactions, accepting alternative identity proofs, and mandating e-khata only for title transfers.
"CREDAI Bengaluru will continue to work closely with the government to proactively identify and propose solutions that will mutually benefit both the government, the real estate sector and the home buyer. We have been assured by the government and BBMP that our suggestions will be considered, and we are confident that all issues about this will be resolved speedily," Mysore said.
In October, BBMP said that all existing khatas in the civic agency's registers have been registered and the 21 lakh-plus draft e-khatas have been released online for citizens to download anytime and anywhere.
Revert stamp duty to previous cap of ₹10 lakh for title deed deposit agreements and mortgage deeds
In its letter submitted to Krishna Byre Gowda, Revenue Minister, Karnataka and Dayananda, Inspector General of Registration and Commissioner of Stamps, Credai members have appealed to revert the stamp duty to the previous cap of ₹10 lakh for title deed deposit agreements and mortgage deeds.
The recent increase in stamp duty rates has disproportionately affected the city's real estate sector. "For instance, a Memorandum of Deposit of Title Deed (MoDT) for a construction finance loan of ₹100 crore incurs a stamp duty of ₹50 lakh compared to the previous cap of ₹10 lakh," CREDAI Bengaluru’s president Amar Mysore told HT.com.
Mysore added that this is also increasing the construction cost of the project. "And in some cases, we may see this being passed on to the buyers --- ultimately impacting the cost of real estate in Bengaluru.
Increase in guidance value rationalized real estate costs in Bengaluru
Mysore added that the increase in guidance value across the city, as proposed in the Karnataka Budget 2023, has rationalized the market price of real estate in Bengaluru.
The Karnataka government, on July 7, 2023, had proposed to revise the guidance values of real estate properties in the state.
The guidance value is the minimum value at which the sale of a property can be registered with the state government. It is also known as the circle rate in some states.
Mysore added that in cities like Hyderabad and Chennai, the market value for real estate properties is almost half of the guidance values. However, in Bengaluru in some cases, the market value was at par or more than the guidance value. “So such a step rationalized the market prices or real estate properties in the city,” he added.
