Hyderabad: The Telangana government is actively considering a proposal to slash stamp duty by half for registration of residential and commercial properties to revive the real estate sector, which is reeling under crisis following the demonetisation.
Though there was also a proposal to increase the market value of lands, it has been kept on hold for now. At present, the stamp duty is six per cent, which is likely to be brought down to three per cent. The stamp duty was last revised in undivided AP in 2013. At that time, it was brought down to a uniform six per cent from 7.5 per cent in urban areas and 8.5 per cent in rural areas. The six per cent duty at present comprises four per cent stamp duty, 1.5 per cent transfer duty and 0.5 per cent registration fee.
The state government feels that the Centre’s crackdown on black money will not give scope for under-valuation of properties in future to evade stamp duty as is being done now and the higher duties existing at present will further affect the growth of the realty sector in state, especially in Hyderabad and surrounding areas, which contribute a major revenue share to the state exchequer.
Chief Minister K. Chandrasekhar Rao is expected to take a decision on this issue soon. However, another prime reason being cited for proposing a stamp duty reduction is the adverse impact of demonetisation on real estate in the new district headquarters.
The 21 new districts that were created on October 11 witnessed a huge realty boom as land prices in the new district headquarters and surrounding areas skyrocketed to over Rs 1 crore per acre, which until then were in the price band of Rs 25 lakh to Rs 50 lakh per acre.
All sub-registrar offices witnessed hectic activity with hundreds of registrations every day. However, the joy was short lived as dem-onetisation was annou-nced on November 8, even before the new districts completed one m-onth on November 11.
All transactions came to a halt as buyers offered '30 lakh in white and '60 lakh in black per acre and sellers were not accepting old currency notes and refused to register lands. Buyers too are now shying away, unable to decide how to offer such a huge amount in white.
The government feels that if the stamp duty is reduced, it will bring down registration costs to some extent, which may fuel the real estate growth again.
Deputy CM holding revenue portfolio Mohd Mahmood Ali said, “Demonetisation has adversely affected the real estate sector in all districts. We want to get the sector back on track by taking up some concrete measures. Redu-ction in stamp duty is one such option being considered.”
Builders too have been demanding reduction in stamp duty to check flow of black money. “This will make housing affordable for common people besides bringing in transparency in property transactions and also check the flow of black money,” said Mr C. Shekar Reddy, past national president, CREDAI.
