Stamp Duty Reduction Impact on Residential Sales.
Arumugham Shankar, COO – Strategic Consulting (India | Sri Lanka | Bangladesh), JLL
While Stamp duty & Registration charges contribute majorly to revenue of States, at difficult times, there is a need to relook. Stamp Duty and Registration Fees are the third or fourth major component of State’s Own Tax Revenue and State’s own tax is the major contribution to state’s revenue as it contributes to about 50% or above. Maharashtra contributes the highest to State’s own tax revenue through stamp duty and registration charges among all states which is about 16% followed by Haryana and UP of about 14%. Delhi and Karnataka contributes to about 11%-12% whereas Tamil Nadu and West Bengal at par with ~10%. Other major states such as Telangana, Rajasthan and Gujarat contribute less than 10%.
Real estate industry is going through many ups and downs over the past few years due to multiple policy changes. The current pandemic has slowed down the growth of the industry again. As Govt. is in forefront addressing the issues of industry stakeholders in the form of various financial, regulatory and fiscal support for reviving the economy, the real estate industry is also attempting many other initiatives to increase the demand. Recently, few states have slashed the stamp duty & registration charges amid the COVID outbreak to boost the economy. It is anticipated that the step would boost consumer sentiment and help towards speedy recovery of the sector.
The real estate industry is continuously experiencing many ups and downs in last 3-4 years due to various policy reforms etc. and recently, the COVID outbreak. Amid the challenges, the industry is becoming more and more transparent. Buyers, Developers are becoming more cautious before investments. There are various ways of considering reduction or concession in stamp duty and registration charges and few are considered to be highly effective considering the revival of sector.