Other states must consider reducing stamp duty like Maharashtra to boost real estate sales: Housing secretary

Durga Shanker Mishra, secretary of the Ministry of Housing and Urban Affairs

Noting that property registrations in Maharashtra have witnessed a marked improvement and returned to pre-COVID-19 levels, Durga Shanker Mishra, secretary of the Ministry of Housing and Urban Affairs (MoHUA), on October 14 said other states too must consider reducing stamp duty on property registration to boost sales.

"We have written to all the states. I am also following up with different principal secretaries and secretaries of the states to see if they can come up with such move which will help reduce cost," Mishra said at a webinar organised by CREDAI in collaboration with Nangia Andersen India.

On August 26, the Maharashtra government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020, to boost the stagnant real estate market hit by the COVID-19 pandemic.

Stamp duty from January 1, 2021, until March 31, 2021, will be 3 percent. Later, the ready reckoner rates were hiked by 1.74 percent.

According to the state government data, property registrations stood at 207 in May. The number increased to 1,839 in June, 2,662 in July, 2,642 in August, and tp 5,597 in September.

The September numbers were almost at par with the February sales registrations at 5,927, according to an analysis by Mumbai-based Propstack, a data analytics firm.

Mishra also called upon real estate developers to participate in the government's newly launched Affordable Rental Housing Complexes (ARHC) scheme for migrant workers.

Providing an update on the stressed asset fund, he said 123 projects - 81,308 units - have been sanctioned with an investment of over Rs 12,0oo crore.

On the Real Estate (Regulation and Development) Act, 2016, he said the Act has provided confidence to lenders that their money would come back.

The finance ministry as well as the Reserve Bank of India (RBI) have taken several steps during the lockdown to address the concern of the real estate sector, he said, adding “these have started showing results".

The Centre, on May 13, had issued an advisory asking real estate regulators in states and Union territories to extend by at least six months the deadline for completion of projects in the face of the coronavirus outbreak.

The outbreak of COVID-19, the respiratory illness caused by the novel coronavirus, be treated as an “act of God” and a “force majeure” event under the Real Estate Regulatory Authority (RERA) Act, the MoHUA had said in the advisory.

Mishra asked builders to utilise the pandemic to retrospect and see how they can reduce cost and adopt innovative technologies for sustainable and inclusive development.

He also asked the industry body CREDAI, which represents over 20,000 builders from across the country, to submit recommendations for the growth of the sector.

CREDAI National President Satish Magar said the government should consider extending the relief given to builders under the RERA law for completion of the projects, as the COVID-19 pandemic has prolonged from the earlier expectations.

“COVID-19 has not gone away yet. We may have to give a fresh representation to the government to provide for further extension for the completion of projects,” he added.