TN Government Amends Property Valuation Rules, Centralizes Decision-Making

In a revolutionary policy measure, the Tamil Nadu government has amended rules for property guideline values, providing itself the power to undertake state revision of guideline values without the involvement of district-level committees. A notification announced by the government on June 23 allowed the Valuation Committee to revise the Market Value Guidelines (MVGs) anytime, if there was no previous financial year revision.

Till now, any revision of MVGs was to be recommended by the district valuation panels, which would analyze the prevailing market rates. This new change eliminates this requirement and completely centralizes the authority with the state’s Valuation Committee under the Registration Department.

This move is aimed at streamlining the process by reducing delays and aligning property values quite dynamically with market trends. Critics, however, warn that the circumvention of district-level inputs tears down local supervision and may invite litigation.

The last major revision of MVGs happened in 2012. The Madras High Court struck down the attempt for 2023, though, causing procedural lapses and the absence of input from local committees.

The amendment comes in an age where the state has been severely criticized for providing certain guideline values which lag far behind actual market prices in most urban and semi-urban areas. This contradiction often leads to the under-valuation of property transactions, thus endangering the revenue of the government and the transparency of the market.

Though the legal amendment may fast-track valuation updates, it raises apprehensions regarding the discretionary authority with which today, the state Valuation Committee functions. “The abolition of district panels might just open up for litigation, especially in instances where the new rates are believed to be arbitrary or politically motivated,” quipped a Chennai-based legal analyst.

Real estate stakeholders are closely watching with some welcoming the fast-coming updates while others are worrying about fairness and consistency in valuation.

Whether property registration becomes easier or more complicated legally is yet to be determined. For now, the Tamil Nadu rulebook has been rewritten on how land value is scored throughout the state.