Tuesday, 8 March 2016

PROPOSED CESS TO INCREASE THE COST OF YOUR PROPERTY



Buying plots or homes from private realtors in and around Bengaluru is set to get costlier. The state government has proposed a 2% cess on the market value of fresh layouts to implement projects for the Ring Road, drinking water, rapid transit and slum development (0.5% each). The levy will be only for private layouts.
“The BDA has submitted a proposal, and it’s before the urban development secretary”

The BDA came up with the proposal because its earlier one -to levy a 5% Metro cess on the market value of fresh land development -was turned down by the Karnataka High Court, which termed it exorbitant. The new proposal has been drafted keeping in mind the court’s directive, he added.

The state government has been collecting cess for the city’s infrastructure development by charging Re 1 on every litre of fuel sold in the state. Almost a fourth of property tax is collected through cess: health (15%), library (6%) and beggary (3%). The BDA had levied several cesses while granting sanction for layouts, but many developers defaulted on payment. Under the new proposal, the cess will have to be paid at the time of approval of the layout plan,” said a officer of the state urban development department.

Private developers are not happy .“The government is al ready losing on property registrations with the increase in registration fee and stamp duty . This will make it worse,” says RM Somashekar, a leading private-layout developer. “`The cess will a big blow for the realty sector,” says S Krishnamurthy ,a developer in Yelahanka.

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