- Stamp duty will be cut from the existing 5% to 2% on apartments costing less than ₹20 lakh.
- The cut in stamp duty will make buying a new flat more affordable.
The Karnataka government on May 26 reduced the registration stamp duty from 5% to 3% for properties costing between Rs 21 lakh and Rs 35 lakh in a bid to give a leg-up to the ailing realty sector. The budget presented by the BJP government had brought down the stamp duty from 5% to 2% for properties costing up to Rs 20 lakh.
During a meeting with revenue department officials, Chief Minister BS Yediyurappa reportedly directed the department to reduce the stamp duty to boost the volume of registrations and help lower- and middle class home buyers.
Thanks to Covid-19 and the subsequent lock down, Karnataka is staring at a loss of Rs 3,542 crore in the ongoing financial year with revenue earning streams like property registration and vehicle registration suffering a big dent in collection drive.
Revenue Minister R Ashoka said biggest beneficiaries will be home buyers from cities like Mysuru, Mangaluru, Hubballi-Dharwad, Belagavi, Kalaburagi and semi-rural areas.
Stamp duty cut will cost state govt Rs 300cr annually
The move will cost the government about Rs 300 crore annually.
With property prices stagnant and multiple projects unsold, the reduction in stamp duty is expected to spur demand in affordable and mid-income housing segments, where green shoots are visible.
“Also, a property in the premium housing segment in smaller cities could cost about Rs 35 lakh and a home buyer can save up to Rs 3 lakh in stamp duty after the reduction,” a department official said.
A home buyer pays stamp duty to the government at the time of registration of her property. The fee is levied to validate the home buyer’s registration agreement by the state government.
The stamp duty varies from state to state and is in the 2-7% region.
Source: TNN, Bengaluru
