In a bid to boost housing sales, the state of Karnataka has reduced the stamp duty charges from 5% to 3% for properties valued between Rs. 35 lakhs to Rs. 45 lakhs. Following the step of the state of Maharashtra, this measure was taken by even the state of West Bengal who has also cut the stamp duty by 2%. The state of Maharashtra has boosted the sale of homes and helped the sales figures of Pune and Mumbai to surge at an unexpected level. With the same hopes, the Karnataka Government has reduced the stamp duty by 2% for properties within Rs. 45 lakhs. This reduction of stamp duty when the buyers’ sentiments are marred by the horrors of the pandemic would help the end-users in taking the purchase decision and boost sales. The sector would also be encouraged to launch new projects by infusing more investment into the industry as the consumers would expedite the registration process and their home buying decision opines the analysts and the market watchers.
In a recent poll by Magicbricks it was revealed that a drop in the stamp duty charges can significantly surge the sales of homes. In the poll, more than 80% of the prospective home buyers have opined that a reduction in the stamp duty rates by their respective states can persuade consumers to buy a home faster and make a quicker decision. The registration and stamp duty charges range somewhere between 5-9% on an average across the various states in the country. These registration and stamp duty charges add considerably to the total cost outlay of any property and act as a deterrent for several first-time property buyers. In the poll conducted by Magicbricks, 83% of the prospective home buyers opined that a drop in the stamp duty rates would prompt them to take a faster home buying decision and 17% said it would not impact their purchase decision.
The market watchers and the analysts opine that stamp duty and registration charges have a direct bearing on the consumer sentiments in real estate. In the recent slashing of the stamp duty charges during the period of September 2020 to March 2021by the Maharashtra government there was a 114% rise in the sale of house property. But after the expiry of the period of discounted rates of stamp duty, there is a dip in sales. The demand for new homes has been boosted with the advent of the new normals like work from home and online education for which people are looking for larger homes. In this context the drop in the stamp duty charges of homes costing more than Rs. 35 lakhs to Rs. 45 lakhs is justified as this is the group of consumers who are more sensitive to price changes.
Following the decision of the Maharashtra government Karnataka and West Bengal have slashed the stamp duty charges. The Delhi government also slashed the circle rates by 20% reducing the overall financial burden of the property buyers. So, it can be comfortably said that in Karnataka with cities like Bangalore, Mysore, Mangalore, and few other urban areas the impact of the drop in stamp duty charges would certainly boost the sales as well as benefit the government exchequer.