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The Tamilnadu Government have reduced the Guide Line Value (GLV) of the Land by 33% from the existing value and increased the fee for registration from 1% to 3 %. Though the reduction in GLV will reduce the stamp duty cost, this will however increase the cost of the flat sold by builders as explained in the below mentioned table. In Tamilnadu the agreement for flat construction to be registered before executing the sale deed for the undivided share of land. The stamp duty and fee for the same is fixed at 1% plus 1% and hence the total cost of registration of agreement is 2%. Under compounding method builder need to pay VAT @ 2% on the value of flat as per the agreement and another 6% to be paid (15% X 40%) by way of service tax. The reduction in the GLV of land will increase the value of the flat. Considering this the below mentioned table is prepared.

Particulars Rate Old GLV with Old Rates Revised GLV with New Rates Old GLV with New Rates
Total Value of the Flat      1,00,00,000 1,00,00,000 1,00,00,000
Land Value –  GLV  25,00,000  16,50,000  25,00,000
Flat Value           75,00,000           83,50,000       75,00,000
Statutory Cost
Vat under compounding method 2%            1,50,000             1,67,000        1,50,000
Service Tax under compounding method 6%        4,50,000     5,01,000   4,50,000
Registration Cost to the Land
          Stamp Duty 7%        1,75,000          1,15,500   1,75,000
          Fee 1%/4%            25,000       66,000        1,00,000
Regn Cost to the Agreement 2%       1,50,000           1,67,000        1,50,000
Total Cost to the Govt        9,50,000    10,16,500     10,25,000
Increase in overall cost to the government             66,500           75,000
Increase in overall cost to the government if the old value is taken as land cost              8,500


From the above table it is evident that the overall cost of the flat in the hands of the purchaser is going up.

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