Over 65% owners paid part of property deal in cash: LocalCircles Survey

'Root cause' of such transactions is regulatory bottlenecks and low circle rates, says LocalCircles

More than 65 per cent of the people who bought a property in the last three years admitted to paying a part of the transaction in cash, alongside bribing agencies and individuals, according to a survey by LocalCircles.

 

The community social media platform took 39,000 responses from people in 310 districts, claiming that real estate is “heavily impacted” by black money and corruption. Two out of three, or 66 per cent, of the people admitted to paying a portion of a property transaction in cash.

 

LocalCircles said that 26 per cent of people said they paid over half of the amount in cash for a property. As many as 19 per cent had paid 30 per cent to 50 per cent of the amount in cash, while another 14 per cent paid 10 per cent to 30 per cent of the amount. Only 7 per cent admitted paying up to 10 per cent of the transaction value in cash.

   

“While in the purchase of flats from a builder in a metro [city] the use of cash may have decreased, it is still very much intact in land and plot transactions or those of old family properties,” the survey said. Cash transactions in real estate deals continue nine years after demonetisation, which aimed to eliminate black money, it said.

 

“Despite government initiatives to link Aadhaar with property for maintaining digitised records, promoting transparency through digital payments and streamlining of the processes, black money still fuels the sector.”

 

The survey said that 44 per cent of the respondents claimed to have paid a bribe to three or more agencies and individuals to speed up property sales. “From patwari to revenue inspector in the local revenue or tehsil office to clerks, typists and deed writers in the sub registrar office to local municipality and land survey offices, any individual selling land has to provide gratification to many.”

 

The “root cause” lies in regulatory bottlenecks and low circle rates, which create fertile ground for under-the-table dealings. “While digital reforms and stricter tax monitoring have reduced cash use in new projects across metros, smaller towns and resale markets remain largely untouched,” it said.

 

LocalCircles did not give the number of actual respondents but said that all of them were validated citizens who had to be registered with it to participate in the survey. As many as 68 per cent of the respondents were men and 32 per cent women. Around 44 per cent of the respondents were in Tier-I cities, 26 in Tier-II and 30 per cent in smaller or rural places.