More States Contemplating To Slash Duty To Enhance Real Estate Sales: Housing Secretary

Following in the footsteps of Maharashtra and Karnataka, more states are considering reducing stamp duty to boost real estate sales, Housing Secretary Durga Shanker Mishra has said.

“Besides Maharashtra and Karnataka that have reduced stamp duties, some more states are seriously considering doing the same,” he told reporters.

To boost sluggish sales during the COVID-19 pandemic, the Centre has time and again suggested states to reduce stamp duty.

The Maharashtra government in August had decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020. Stamp duty from January 1, 2021, until March 31, 2021, is 3 percent.

On January 6, the state approved the proposal to cut the premium on real estate projects by half till December 31, 2021. Developers availing of the scheme would have to pay full stamp duty and registration charges on behalf of homebuyers.

A stamp duty cut by the Maharashtra government, low interest rates, discounts offered by developers and the COVID-19 induced price correction saw the Mumbai registrar’s coffers swell as homebuyers made the most of the opportunity and came forward to buy property.

According to a study by Propstack, properties worth Rs 34,000 crore were sold in Mumbai in December 2020. The number stood at Rs 10,846 crore in December 2019. The sale registration volume grew by 3X in December 2020 versus the same period in 2019. The number stood at Rs 6,433 crore in December 2019 and was at Rs 19,584 crore in December 2020.

Another report by Knight Frank India has said that the registration of residential properties in Mumbai jumped over two-fold in December to 18,854 units compared with November on account of the reduction in stamp duty by the Maharashtra government.

In November, the Karnataka government slashed the stamp duty on houses costing less than Rs 20 lakh to 3 percent from 5 percent.

(Source: Moneycontrol)