Bengaluru: In the encouragement for the surrounding real estate industry, the cabinet on Thursday decided to reduce stamp duty costs from 5 percent to 3 percent for the average price of up to 45 lakh rs.
It was also resolved to form a committee to study the demand for the pandemic-hit sector to reduce the value of the properties.
“We will take the last call based on the Committee report,” said Minister of Law and Parliament Basavaraj Bommai.
Decisions about stamp duty are expected to help improve property registration and lift sentiment in affordable housing segments throughout the state.
In May 2020, the government had slashed stamp duty in homes at a price between Rs 21 Lakh and Rs 35 Lakh with the same level.
In a budget of 2020-21, the unit for RS 20 Lakh saw a decline.
The initial plan was to reduce costs only for property to RS 20 Lakh, but the government realized that incentives would not spur demand in urban centers such as Bengaluru, where such a lowcost unit was difficult to find.
Finally decided to expand PurView cuts to the price range of the 35-lakh RS and now it becomes Rs 45 Lakh.
Despite being happy with the government’s decision, real estate developers believe it may not have a significant impact on demand.
According to Suresh Day, Chairman of Bengaluru Credai Chapter, affordable housing contributed about 20 percent of the development of real estate in the state.
“While we welcome to move to cut stamp duty, which will help buyers of middle-class home and for the first time, the market requires flat cuts in all segments,” he said.
The day added that after the second wave of Covid-19, the real estate market had found it challenging to take steps, while prospective buyers were still worried about how the pandemic would affect their financial status.
In the midst of the chat that the Chairperson of the BS Minister Yediyurappa, 78, can make a way for younger leaders, the cabinet has cleared other major proposals.
The plan will involve the construction of 5 lakh houses – 4 lakh in the rural Karnataka and 1 lakh in urban locations – under various housing department schemes.
Bommai said that the project would be completed in the next two years and is expected to cost Rs 8,000 Crore.