2 min read.Updated: 23 Jul 2021, 12:54 PM ISTLivemint
Stamp duty for properties worth up to ₹45 lakh has been cut from 5% to 3%.
NEW DELHI :
To provide a boost to the real estate sector, the Karnataka government on Thursday approved the stamp duty cut in a cabinet meeting. The stamp duty for properties worth up to ₹45 lakh has been cut from 5% to 3%. This move will result in cost saving for the homebuyers.
A cut in stamp duty reduces a homebuyer's cost and is therefore considered positive for the real estate sector, which has been struggling for the past few years. Stamp duty is the fee paid at the time of the registration of the property and varies from state to state. For example, if the stamp duty is 5% on a property of ₹30 lakh, a 2% cut will save the homebuyer ₹80,000.
“The Karnataka government’s decision to slash stamp duty from 5% to 3% on registration of apartments below ₹45 lakh will strike the right sentiment chord with affordable-home buyers, reduce their financial stress and foster demand creation for low- and mid-income housing. This welcome move will encourage first-time homebuyers to foray into homeownership, strengthen the circle of investment in the real estate sector, accelerate purchase decisions and at the same time boost the confidence of real estate developers in India’s IT Capital who have been affected by piling inventory and slow sales," said Rahul Purohit, national sales head, Square Yards.
In the past it was seen that stamp duty cuts have helped in clearing the inventory of the sector. The Maharashtra government temporarily slashed its stamp duty. Certain markets such as Mumbai registered record numbers of sales supported by low interest rates, attractive discounts from developers as well as people’s inclination to buy their own house amid the pandemic.
However, some experts feel that the stamp duty cut should have been across the price categories as was done by the Maharashtra government. Limiting it to properties worth up to ₹45 lakh may not lead to desired results.
“While the move is definitely welcome, it is not likely to give a significant boost to housing sales in Bengaluru similar to what was seen in Maharashtra, where the state cut stamp duty for homes across all budget segments and not just one category," said Anuj Puri, chairman, Anarock Property Consultants.
“The fact is that housing demand in Bengaluru is largely skewed towards the mid-segment—properties priced within ₹50 lakh to ₹1 crore. For these properties, the stamp duty charges, unfortunately, remain unchanged at around 5%. The positive impact would be more visible in cheaper cities such as Dharwad, Mysuru, Hubli and Belagavi," added Puri.