Thiruvananthapuram: The state government is looking to increase the existing fair value of land, which was fixed in 2014, by 10-20 per cent, it was learnt.
The revision of fair value, which will be among a host of budgetary proposals aimed at wading through the ongoing financial crunch by improving revenues, will be presented in the upcoming state Budget scheduled for February 2.
There are indications that the government has decided against increasing the stamp duty and fee for registering the property because an increase in fair value would result in a proportionate rise in revenues from property transactions.
The fair value system, introduced by the state government in 2010, was effected a 50 per cent rise across the board in 2014. However, the government believes that in most of the places the existing notified fair price is much lower than the market price.
In a recent incident, a property worth at least Rs 4 lakh was found to be having a fair value of just Rs 7,500.
The government is of the opinion that the revised fair value is at least 30 per cent lower than the original value of land.
Though initially there was a plan to revise the entire structure of the fair value system, it was dropped in view of the complexities involved, and decided to hike the existing fair value by 10-20 per cent.
The annual government revenue from property transactions, including stamp duty and registration fee, comes around Rs 3,000 crore. With the hike in fair value, there is expected to be an additional revenue generation of about Rs 100 crore.
The stamp duty is 8 per cent of the fair value, while the registration fee is fixed at 2 per cent of the same.
Since this will be the first state budget after individual states lost their right to impose sales tax on goods following introduction of the Goods and Services Tax (GST) regime, it is expected that user fee for various services would be increased.
Finance minister Thomas Isaac will shift to the Inspection Bungalow in Vizhinjam to prepare the third budget of the Pinarayi Vijayan-led government.
The discussions with revenue officials were completed on Monday. After preparing the budget speech, Isaac will hold a meeting with the chief minister on February 1 at Vizhinjam.
After making the necessary changes, the budget document will be sent for print the same night.
