The state government has lost stamp duty collection of over Rs 500 crore during the lockdown from March to June as realty market transactions came to a halt. However, data show the receipts have bounced back in June and continues to be at par with last year’s collections in July.
But there is still uncertainty if the department can take out its target of Rs 5,600 crore for the current financial year, factoring in a subdued performance of housing market. “Our collections grow in the range of 10-15%. Last year, the receipts grew close to 10%. But this year, there is an uncertainty,” said an official of the stamp and registration department.
He said that if the trend witnessed in June and July continues, the target of Rs 5,600 crore will be achieved but a lot depends on how the realty market behaves which is again hinged to the spread of the pandemic.
“June and the half of July could have witnessed registrations that could not happen in March, April and May. So, the recovery should not be treated as a trend. Collections over the next two to three months can give a better idea of if housing purchases are happening or not at the scale that can help reach closer to the target,” said the official. Over 90% of the stamp duty of the government comes from real estate transactions though there are 34 documents on which it is levied. But some substantial duty was realized in June from Reliance after the company formed a joint venture with BP. “About 115 petrol pumps were registered under Reliance Jio BP JV name which substantially contributed to the stamp duty collections in June,” said a source.
Builders in the state said that even before the Covid outbreak, demand for housing was sluggish despite price reductions. Now with salary cuts and uncertainty over jobs, people are less confident of buying a house.
“The demand is slowly coming back but we don’t know when the industry will reach the pre-Covid days. It could be 3 months, 6 months or till April 2021. There is not much scope to reduce prices either to attract buyers because the rates were already closer to the bottom when the pandemic hit country,” said Anand Mishra, a prominent builder in the city. But property developers said that some are reducing prices to tide over the liquidity crunch but the reductions are desperate attempts by the financially stressed builders.
RERA has extended 6 month relaxation for completion of projects keeping in view the harddship of the builders owing to Covid. This means a lot of new supply will not hit the market and accordingly, the possible transactions will not take place as well. This is going to reduce the stamp duty collections of the department.