Karnataka Cabinet's decision to reduce stamp duty on the registration of housing prices between Rs 35-45 lakh from 5% to 3%, is unlikely to give a significant boost to housing sales in Bengaluru similar to what was seen in Maharashtra, where the state cut stamp duty for homes across all budget segments and not just one category.
Anuj Puri, Chairman - ANAROCK Property Consultants says, "With the Karnataka Cabinet's decision to reduce stamp duty on the registration of housing prices between INR 35-45 lakh from 5% to 3%, Karnataka joins the bandwagon of states which understand that this is by far the single-biggest housing demand booster. However, while the move is definitely welcome, it is not likely to give a significant boost to housing sales in Bengaluru similar to what was seen in Maharashtra, where the state cut stamp duty for homes across all budget segments and not just one category," he says.
According to him the fact is that housing demand in Bengaluru is largely skewed towards the mid-segment - properties priced within Rs 50 lakh to Rs 1 Crore. For these properties, the stamp duty charges, unfortunately, remain unchanged at around 5%. The positive impact would be more visible in cheaper cities like Dharwad, Mysuru, Hubli and Belagavi.
"In Maharashtra, the stamp duty cut made a massive positive difference to sales while it lasted, and this state is still feeling negative after-effects in terms of slower sales after the stamp duty reduction period expired and was not revived. West Bengal recently followed suit with a 2% stamp duty cut coupled with a 10% reduction in circle rates, which will work wonders for Kolkata's housing market," Puri says.
According to Rahul Purohit, National Sales Head, Square Yards, The Karnataka government's decision to slash stamp duty from 5% to 3% on registration of apartments below Rs 45 lakhs will strike the right sentiment chord with affordable homebuyers, reduce their financial stress and foster demand creation for low- and mid-income housing.
"This welcome move will encourage first-time homebuyers to foray into homeownership, strengthen the circle of investment in the real estate sector, accelerate purchase decisions and at the same time boost the confidence of real estate developers in India's IT Capital who have been affected by piling inventory and slow sales," he says.