With the financial year coming to an end, the Noida registration department has so far collected around Rs 1,300 crore and is expecting another Rs 200 crore by the end of this month, sources said, adding the expected loss will be around Rs 300 crore on account of COVID-19.
“Noida’s stamp registration department had collected Rs 1,856 crore from April 2019 to March 2020. This was before COVID-19. From April 2020 to February 2021, the total collection stands at Rs 1,300 crore. We are hoping to collect over Rs 200 crore until March 2021 which is a loss of almost Rs 300 crore,” sources in the registration department told Moneycontrol.
The annual target for this fiscal (2020-2021) is Rs 3,148 crore. The department did not register any property in April 2020 and the revenue was zero that month. In May, June and July, however, the department collected Rs 12 crore, Rs 60 crore and Rs 110 crore, respectively, as stamp duty. In August and September, the department collected around Rs 300 crore and received around Rs 600 crore in the third quarter through stamps and registration.
Buyers are gradually coming forward to register their projects and collection has also increased in the last few months largely due to several international firms such as IKEA investing in the region, sources said, adding this is expected to increase in the next financial year.
Last month, Ingka Centres, part of the Ingka Group that includes IKEA Retail and Ingka Investments, announced its plans to invest close to Rs 5,500 crore (over 600 million euros) for a shopping mall spread across a 48,000 square metre plot in Noida, Uttar Pradesh. The land allotment for the commercial plot located in Sector 51 was transferred by the Noida Authority to IKEA on February 19. The authority had received Rs 850 crore from IKEA.
“The registration department received close to Rs 100 crore by way of stamp duty from IKEA,” sources said.
Sources said, on average, the department has been receiving close to Rs 170 crore per month since November 2020 in collections. It collected close to Rs 250 crore in February, 2021. The IKEA deal was registered in February.
Out of the 10,000 units under Amrapali projects, as many as 1,500 flats have been registered until January 2021 of which the department has collected Rs 62.40 crore, sources in the stamps department said.
They said the losses have also been incurred on account of several housing units not getting registered due to the registry logjam in the district. Developer associations have said that around 50,000 homebuyers are waiting to get their properties registered across projects located in Noida, Greater Noida and Yamuna Expressway.
In June last year, the Supreme Court, while hearing the Amrapali case, had directed these authorities to charge an interest of 8% on the outstanding premium and other dues from developers. Noida Authority has filed a review petition before the court. The hearing is scheduled for March 22.
“Losses on account of this issue are expected to be around Rs 100 crore,” they said.
The Confederation of Real Estate Developers’ Association of India (CREDAI) had written to the UP government to reduce stamp duty and registration fees to boost demand. The Uttar Pradesh unit of NAREDCO has also written to the chief minister Yogi Adityanath to reduce stamp duty to boost demand in the real estate sector.
In Gautam Budh Nagar district (comprising Noida and Greater Noida), the stamp and registration department levies 5 percent of total property cost (flat, plot, house or other property) as stamp fee at the time of execution of a lease deed.
Since February 2019, the UP government has been charging 1 percent of total property cost as a registration fee. Under an earlier rule, only Rs 20,000 was charged as registration fee. It has also made it mandatory that a buyer and developer execute an agreement and pay a 1 percent stamp fee for the document. The total stamp duty fee in Gautam Budh Nagar, therefore, works out to be around 7 percent of the total cost of the property.
It should be noted that the Maharashtra government in August 2020 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.
In November, the Karnataka government slashed the stamp duty on houses costing less than Rs 20 lakh to 3 percent from 5 percent. Last week, it proposed a reduction of stamp duty charges to 3 percent for homes valued between Rs 35 lakh to Rs 45 lakh.
The Delhi government on February 5 decided to reduce circle rates in the capital across categories— residential, commercial and retail—for six months as part of its efforts to provide relief to the real estate sector reeling under the impact of COVID-19 pandemic.
(Source: Moneycontrol)
