1 min read.Updated: 21 Sep 2021, 04:46 PM ISTMeghna Sen
The Karnataka Legislative Assembly has passed an amendment to the Stamp Act, 1957, slashing the stamp duty. The 2% reduction is applicable only on first-time registration, primary sales in other words
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In a bid to encourage the lower middle class and the poor to buy a flat, the BJP-led government in Karnataka has said that the stamp fee will be reduced to 3% from 5%. This will be applicable to flats priced between ₹35 lakh and ₹45 lakh.
The State Legislative Assembly has passed an amendment to the Stamp Act, 1957, slashing the stamp duty. However, this 2% reduction is applicable only on first-time registration, primary sales in other words.
Karnataka Revenue Minister R Ashoka reportedly said that lakhs of flats in Bengaluru and in other cities have remained unsold amid the pandemic. The stamp duty reduction, the minister said, will help both the real estate sector, which is struggling with a pile of inventory as well as low-income group families.
Speaking on the matter, Shantanu Mazumder, Executive Director – Karnataka, Knight Frank India, said, “Karnataka Government’s decision to slash stamp duty by 2% will provide marginal boost to the real estate sector. Although the move is definitely progressive, it will only make marginal difference to the volume of sales because 2% is capped for properties worth 45L only. While it will save cost to homebuyers, the volume of sales below 45L is restricted. Had the stamp duty cut been across the price categories as was done by the Maharashtra government, the impact would have been desirable. Limiting it to properties worth up to ₹45 lakh may not lead to volumes."
The Bill takes forward the announcement made by former Karnataka chief minister BS Yediyurappa, while presenting the budget as CM in March 2021.
The decision on reducing the stamp duty was taken at a Cabinet meeting, chaired by Yediyurappa months back.
With this, Karnataka has joined the bandwagon of States, which understand that this (stamp duty cut) is by far the single-biggest housing demand booster.