BENGALURU: In a major boost to the flat lining real estate market in Karnataka, the cabinet meeting on Thursday saw the government approve the budget promise of cutting the stamp duties on properties priced at Rs 45 lakh and below.
Accordingly, the stamp duties have been slashed by 2 percentage points and bringing it down from 5 percent of the property value to 3 percent.
The decision is expected to increase the numbers in property registrations and lift the market for affordable housing in the state and, in specific, Bengaluru.
It may be recalled that in May 2020, the state government had slashed the stamp duties on housing between Rs 21 lakh to Rs 35 lakh by the same rate, prior to which the housing up to Rs 20 lakh had seen a reduction in the 2020-2021 budget.
While the initial decision was supposed to cap the slashing of stamp duty rates for properties only up to Rs 20 lakhs, the state government realised that in urban centres like Bengaluru it was not possible to find housing in that range and making the sop ineffective.
As a result, the state government decided to expand the purview of the sop to Rs 35 lakh, and now to Rs 45 lakh.
However, real estate developers, though pleased with the decision of the government of slashing the stamp duty, believe that it is going to have a miniscule impact.
According to CREDAI Bengaluru chapter chairman Suresh Hari, the affordable housing market is not more than 20 percent of the real estate development in the state.
“While we welcome the state government decision to cut the stamp duty, helping a lot of lower middle class and first time home buyers, the market requires a flat cut across all segments and not restricted to one section of it,” said Hari.
He said the real estate market, after the Covid-19 pandemic second wave struck, has been very slow in picking up pace with fear among buyers over the impending third wave of the pandemic.
The cabinet on Thursday also resolved to form a committee to look into reducing the guidance value of housing across the state, as there has been demands from the real estate developers to reduce the government approved rates for better market dynamics.
“There have been demands from various quarters of the society to revise the guidance value of areas in the state. This will be studied by a committee formed for the purpose of it,” said law and parliamentary affairs minister Basavaraj Bommai.
Meanwhile, in other cabinet decisions, the state government also decided to push for a populist move in housing, amid talks of chief minister B S Yediyurappa being asked to step down.
The cabinet on Thursday cleared the construction of as many as 5 lakh houses-- four lakh in rural Karnataka and one lakh in urban locations-- under the various housing department schemes.
Bommai said the project of constructing the houses will be completed in the next two years and is estimated to cost Rs 8,000 crore.
