Understanding Composite Value Registration in Tamil Nadu

Introduction

The introduction of the Composite Value Registration system in Tamil Nadu marks a significant shift in the way real estate transactions, particularly for apartments and villa plots, are conducted. Effective from December 1, 2023, this system ensures that both land and constructed areas are registered in a single document, streamlining the process and enhancing transparency. This article delves into the concept of Composite Value Registration, its benefits, and its impact on real estate transactions in Tamil Nadu.

What is Composite Value Registration?

Composite Value Registration is a system introduced by the Tamil Nadu government to ensure that the entire property, including land and constructed area, is comprehensively registered in one document. This approach replaces the previous method where buyers had to register the undivided share of land (UDS) and the construction agreement separately. The new system aims to eliminate discrepancies and disputes that often arose from the old registration process.

Importance of Composite Value Registration

• Comprehensive Documentation: The new system ensures that the entire property is registered as a single entity, reducing the risk of legal disputes over land and construction ownership.
• Revenue Enhancement: By integrating land and construction registrations, the system increases government revenue from stamp duty and registration fees.
• Plan Compliance: The system helps prevent plan deviations by ensuring that the registered property adheres to the approved construction plans.
• Buyer Confidence: With full documentation, buyers can secure bank financing more easily and have greater confidence in the legitimacy of their purchase.

How is Composite Value Determined?

The determination of Composite Values involves a detailed process led by the Registration Department. The steps include:

1. Survey and Research: Extensive surveys and research are conducted to gather data on property values across different localities.
2. Public and Industry Consultation: Input from the public and real estate professionals is sought to refine the system and ensure it reflects market realities.
3. Finalization of Values: Composite Values are established for all streets and survey numbers, with special attention to high-density areas like Chennai. These values are periodically revised to stay in line with market conditions.

Impact on Real Estate Transactions

• Buying and Selling: The new system simplifies the buying and selling process by providing a clear and unified property valuation. This makes negotiations more straightforward and helps avoid disputes.
• Stamp Duty and Registration Fees: Stamp duty and registration fees are calculated based on the total property value, leading to a potentially higher but more accurate cost of registration.
• Loan Sanction: Banks and financial institutions use Composite Values to assess the value of the property for loan sanctioning, ensuring that the loan amount aligns with the property's true market value.

Example Scenario

Consider a buyer looking to purchase an apartment in Chennai. Under the Composite Value Registration system, the buyer can determine the property's full value, including both land and construction, based on the Composite Value of the area. For example, if the Composite Value for a particular street is ₹10,000 per square foot, and the apartment's super built-up area is 1,000 square feet, the property's value would be ₹1 crore.

Conclusion

The Composite Value Registration system is a significant advancement in the real estate market of Tamil Nadu. It addresses previous issues related to property registration, enhances transparency, and ensures fair valuation. For buyers, sellers, and the government alike, understanding and adhering to this system is crucial for smooth and lawful property transactions. By embracing Composite Value Registration, stakeholders can contribute to a more efficient and trustworthy real estate market in Tamil Nadu.

Disclaimer

This page provides general information on Composite Value Registration in Tamil Nadu for informational purposes only. While efforts are made to ensure the accuracy of the content, users are advised to consult relevant authorities or professionals for specific advice related to property transactions.