80% of homebuyers will purchase house if stamp duty charges are cut: Poll
Property registration and stamp duty charges range between 5 percent and 9 percent on an average across the country.
Can Fin Homes | National Housing Bank imposed a penalty of Rs 29,13,234 plus applicable GST at 18 percent, on the company.
Government initiatives like reduction in stamp duty can significantly spur home buying as more than 80 percent of prospective homebuyers said that reduction of stamp duty by their respective states could influence them to buy a house, the latest Magicbricks Consumer Poll has revealed.
Property registration and stamp duty charges range between 5-9 percent on an average across the country and add significantly to the overall cost of the property and also act as a deterrent for many first-time home buyers, it said.
But ever since the outbreak of the pandemic in 2020, state governments like Maharashtra and Karnataka have already taken the lead in cutting stamp duty. The ministry of housing and urban affairs has also written to other state governments to reduce stamp duty.
In the latest poll conducted by Magicbricks, an overwhelming 83 percent of the respondents feel that a cut in stamp duty would prompt them to buy a house, while 17 percent feel that it would have no impact on their purchasing decision.
“We have witnessed a 114 percent rise in housing sales in Maharashtra during the period of stamp duty cuts, between September 2020 and March 2021. But ever since the expiry of the stamp duty period, we are seeing a dip in sales. This is contrary to the constant rise in demand for housing and home loans that we are witnessing on our platform. With Work-For-Home emerging as the new normal, people are looking for bigger size houses with an extra room and hence the state governments should consider offering stamp duty holidays that would lessen the burden on homebuyers,” said Magicbricks CEO Sudhir Pai.
In 2020, the Maharashtra government rolled out concessions in stamp duty for first sale transactions, following which, it became the first state to reduce the stamp duty charges in two slabs. This resulted in a significant rise in the number of property transactions and subsequent registrations in the state. Many real estate bodies and groups have been advocating for stamp duty subsidies and more states are expected to follow Maharashtra’s stamp duty model.
To boost real estate, the Karnataka government had also reduced stamp duty charges to 3 percent from 5 percent for properties priced between Rs 35 lakh and Rs.45 lakh. Thereafter, the Delhi government slashed the circle rates by 20 percent to reduce the financial burden.