Centre urges states to follow Maharashtra, Karnataka, Delhi examples
State government initiatives like reduction in stamp duty can boost home buying, says over 80 per cent prospective buyers, according to the latest Magicbricks Consumer Poll.
Property registration and stamp duty charges range between 5 per cent and 9 per cent across the country, and add significantly to the overall cost of a property, sometimes even acting as a deterrent for many first-time home buyers. But ever since the outbreak of the pandemic in 2020, state governments like Maharashtra and Karnataka have taken the lead by cutting down stamp duty. The Union housing ministry has also appealed to other state governments to reduce stamp duty, as it would lessen the burden on home buyers.
Earlier, NAREDCO chairman Rajeev Talwar had said there is a need to cut stamp duty. During a webinar last week, he said state governments should reduce stamp duty on registration of properties by at least 50 per cent to boost housing sales and revive the real estate sector.
In the latest poll by Magicbricks, 83 per cent of respondents said a cut in stamp duty would prompt them to buy a house, while 17 per cent feel it would have no impact on their purchase decision.
Commenting on the consumer sentiment, Sudhir Pai, CEO, Magicbricks, said: “We have witnessed a 114 per cent rise in housing sales in Maharashtra during the period of stamp duty cuts, between September 2020 and March 2021. But ever since the period expired, we are seeing a dip in sales. This is contrary to the constant rise in demand for housing and home loans that we are witnessing on our platform. With Work-For-Home emerging as the new normal, people are looking for bigger sized houses with extra room(s), and hence state governments should consider offering stamp duty holidays that would lessen the burden on homebuyers.”
Last year, the Maharashtra government had rolled out concessions in stamp duty for first sale transactions, following which it became the first state to reduce stamp duty in two slabs. This resulted in a significant rise in number of property transactions and subsequent registrations in the state. Many real estate bodies and groups have been advocating stamp duty subsidies. More states are expected to follow Maharashtra’s model soon.
To boost real estate, the Karnataka government had also reduced stamp duty charges to 3 per cent from 5 per cent, for properties priced between Rs 35 lakh and Rs 45 lakh. Thereafter, the Delhi government too slashed circle rates by 20 per cent. Above all, central government officials, in several interactions suggested that state governments should reduce stamp duty charges to boost real estate sentiments and thereby sales in their respective states.