Stamp Duty at 5%
March 29, 2012, Bangalore
Home buyers, struggling to keep pace with high interest rates and input costs, can breathe a little easy with this budget. The stamp duty has been reduced from 6% to 5% on sale deeds. The registration charge of 1%, however, remains.
The stamp duty reduction translates into savings of Rs 50,000 on a Rs 50 lakh property. "Reducing the stamp duty will make the product more affordable especially in today's high inflationary scenario. The move is in line with the JNNURM directive to state governments to maintain uniformity in stamp duty," said Irfan Razack, CMD, Prestige Group.
J C Sharma, MD, Sobha Developers, said the move is an attempt to spur demand among home buyers who are sitting on the fence waiting for some bait. "This is a progressive step," he said.
Though the Bangalore market recorded healthy property sales compared to peers in the second and third quarters of 2011, sales were subdued in the fourth quarter. The Bangalore market saw absorption of 3,370 units in the fourth quarter, against 3,743 units in the third quarter, said a report by real estate consultancy Jones Lang LaSalle India.
The budget has also reduced stamp duty from 6% to 1% (subject to a maximum of Rs 15 lakh) on the market value of the property in respect to joint development agreements and power of attorney. "The state saw fewer joint development agreements last year because of high stamp duty. This move will revive joint development agreements," said Sharma.
Ravindra Pai, MD, Century Real Estate, said people who had signed joint development agreements weren't executing them because of the high transaction cost. This could now change.