2 min read.Updated: 08 Mar 2021, 05:39 PM ISTRenu Yadav
Bengaluru had 71,198 unsold units as of the end of last calendar year, of which around 9,185 units fall in the price bracket of Rs35 lakh-Rs45 lakh, which is only 13% of the total unsold inventory in Bengaluru
NEW DELHI: To boost property sales, the Karnataka government has reduced stamp duty charges to 3% from 5% for flats priced between ₹35 lakh and ₹45 lakh. The cut in stamp duty charges, however, will benefit only a limited number of homebuyers as it is valid for a certain price segment, experts feel.
“...unlike Maharashtra, Karnataka has chosen only the affordable housing segment for the stamp duty reduction, which will give a boost specific to this particular category alone. As per the Proptiger Q4 report, the affordable segment contributes the highest share to the national stock of unsold inventory at 48%, with Bengaluru having 71,198 unsold units as of the end of last calendar year, out of which around 9185 units are in the price bracket of ₹35 - 45 lakh, which is only 13% of the total unsold inventory in Bengaluru," said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com.
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 ₹40 lakh, a 2% cut will save the homebuyer ₹80,000.
“The relief is just marginal when compared to the size of Karnataka real estate market especially Bengaluru. If state government doesn't want to increase the relief threshold than at least it should consider expanding this stamp duty relief to residential plots, industrial plots and row houses," said Anuranjan Mohnot Managing Director and CEO, Lumos Alternate Investment Advisors.
Karnataka's move follows the Maharashtra government reducing stamp duty charges across the board for a specified time period. Maharashtra cut stamp duty to 2% from 5% till 31 December, 2020, and to 3% up to 31 March, 2021. This had pushed up real estate sales in the state.
"Maharashtra government 's decision to reduce stamp duty helped in higher registration of properties during September-February period of this fiscal year. Karnataka government has taken the right step to reduce the stamp duty. Prospective homebuyers will benefit as they will have to pay less for registration of properties. We expect the demand to rise in the state. Other state governments should also consider taking such measures," Rahul Purohit, principal partner & head, India Sales, Square Yards.