[CITIZENS' Mail - (24-10-2016)]

Land valuations required for transactions

Western Provincial Council (WPC) has imposed a condition that for all land sales and gifts irrespective of any agreed price in the case of sales or the 1978 valuation of the land that was accepted for gifts, the parties must obtain a valuation of the land from the Revenue Office of the Province. For the WPC three Provinces the three offices are located at Colombo, Gampaha and Kalutara.

I wonder whether the staff who deal with these valuations have any experience at all in valuations. Recently I was involved in facilitating a family member to gift his house to his son. In this transaction the donor received the house from his father upon a deed of gift about 15 years back.

I engaged a friend of mine to draft the deed of gift and I was told about the new requirement. When the donor completed the relevant forms and attended the office in Battaramulla the land and house was given a value of 10 million.

The female officer had advised that they normally visit the land before giving a valuation. If the Donor was happy to accept the valuation of 10 million she had said that she could complete the forms and give. However the Donor had told her that he will come the following day. The Donor attended the office the next day and have pleaded with the female officer to reduce the value and it was reduced to 7.5 million. The basis for the reduction is not known. I must say that the market value of that house could be more than this valuation.

I wish to question the authorities or ask a knowledgeable person to highlight the criteria followed in determining the valuation and if these officers are qualified to issue these valuations. What I noted from the episode above is that the valuation is flexible. I submit that when it is a gift within a family there should be some accepted concession/discount given.

I state this as many prefer to gift their house if that is the only asset. If the government encourage gifts, that is likely to bring in revenue for the government. It is time that they revise this law in relation to gifts.

Why I take the above view is when only asset is a house people do not want to write Last Wills as proving them in Court takes years and the revenue to the government that come from the court stamp duty is negligible.

Hemal Perera

Via email