In a bid to revive the realty sector in the state, the Karnataka government on Thursday decided to reduce stamp duty on registration of apartments that cost up to Rs 45 lakh from 5% to 3%. Briefing reporters after a cabinet meeting, Law and Parliamentary Affairs Minister Basavaraj Bommai said that the stamp duty reduction is aimed at providing relief to homebuyers looking for affordability. "This will be applicable for the first registration of these apartments. There is also a proposal for upward revision of guidance value. This will be examined by a specific committee constituted for it," he said.
Stamp duty refers to the fee paid at the time of registration of the property and differs from state to state. A reduction in stamp duty lowers the homebuyerâ€™s cost and this move is expected to have a positive impact on the housing sector.
â€śWith the Karnataka cabinet's decision to reduce stamp duty on the registration of housing prices between Rs 35-45 lakh from 5% to 3%, Karnataka joins the bandwagon of states which understand that this is by far the single-biggest housing demand booster. However, 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,â€ť said Anuj Puri, Chairman, ANAROCK Property Consultants.
â€śThe fact is that housing demand in Bengaluru is largely skewed towards the mid-segment â€” properties priced within Rs 50 lakh to Rs 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 like Dharwad, Mysuru, Hubli and Belagavi,â€ť he added.
Suresh Hari, chairman of the Bengaluru chapter of CREDAI, welcomed the move but said that a limit should not be fixed for the property. â€śWe welcome the move but it will hardly impact about 20-25% of the properties.To kickstart the economy, we expect much more concessions. In doing that, they will get more revenue. We are looking at more leverage and concessions across the board,â€ť he added.
"We are pleased with the Government of Karnataka's decision to reduce the stamp duty from 5% to 3% on properties priced at Rs 45 lakh and below. We are optimistic that this decision will encourage new homebuyers to enter the market and fulfil their desire for homeownership. It is a significant stimulus for the affordable housing segment and will act as a catalyst for new projects and increased demand in the sector,â€ť said Ashish R Puravankara, Managing Director, Puravankara Limited.
Meanwhile, the cabinet also approved the construction of five lakh houses for both urban and rural poor in the state in next two years at an estimated project cost of Rs 8,000 crore. "Four lakh houses in rural areas will be built under various schemes including Basava Housing Scheme, Dr BR Ambedkar Housing Scheme and Devaraj Urs Housing Scheme, while one lakh houses will come up in urban areas under the Vajpayee City Scheme and BR Ambedkar Housing Scheme (Urban)," Bommai said.
With IANS inputs