The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has requested the state government to reduce the stamp duty on property registration by two percentage points to help attract homebuyers amid unprecedented demand shrinkage caused by the pandemic.
Additionally, it has also requested a flat Rs 2,000 registration fee for agreement-to-sale documents, which is currently at 25% of the stamp duty charges.
A Rs 50-lakh property sale attracts Rs 2.5 lakh stamp duty at 5% on present rates and an additional Rs 65,000 has to be paid (25% of Rs 2.5 lakh) as registration of agreement to sale.
The move, if implemented, is expected to give a boost to the realty sector, providing relief to developers with unsold inventory over the years.
“We have made the recommendation keeping in mind the interests of buyers and developers,” said Rajive Kumar, chairman, UP-RERA.
The stamp duty in the state ranges from 5% to 7% of the property value, and RERA has requested it be reduced by two percentage points.
Maharashtra has reduced the stamp duty on property registrations to 2% for transactions between September 1 and December 31 from the existing 5%.
In Madhya Pradesh also stamp duty on sale and purchase in urban areas has been reduced from 3% to 1% until December 1.
“Maharashtra and Karnataka have reduced stamp duty post-Covid as a relief to homebuyers. Reduction in any type of taxation is good for demand stimulation. The reduction in rate will surely be compensated by higher volumes,” said Pankaj Bajaj, president, Confederation of Real Estate Developers Association of India (CREDAI), NCR.
Developers have also been seeking a reduction in stamp duty to deal with the demand slump.
“The recommendation made by RERA is in line with the demand of developers. It would revive economic activity as those planning to buy will fast-track their decisions,” said RK Arora, President, NAREDCO-UP.
Housing and Urban Affairs Secretary Durga Shanker Mishra had also written to the states to reduce stamp duty to bolster demand in the real estate sector.
“As lower stamp duty effectively means reduction of cost for end-users, UP RERA’s proposal, if accepted, will bode well for the property markets of Noida and Greater Noida,” said Mani Rangarajan, Group COO, PropTiger.com. “It will make these places an attractive destination for buyers and considering that Jewar Airport is coming up, the proposed reduction will help Noida and Greater Noida compete better with Gurugram.”
