Some of the states with key property markets have already announced the reduction in stamp duty and the move has resulted in higher property sales and registration activity.
The Ministry of Housing and Urban Affairs has recommended all the states to consider reducing stamp duty of property transactions in a bid to push real estate activity, generate more revenue and aid the economic growth, said Durga Shanker Mishra, Secretary, Ministry of Housing and Urban Affairs.
Land being a state subject, the decision on stamp duty lies with the respective state governments. Some of the states with key property markets have already announced the reduction in stamp duty and the move has resulted in higher property sales and registration activity.
Maharashtra, for instance, has reduced stamp duty from 5% to 2% up to December end and to 3% for the period of January-March 2021. Karnataka, too, has reduced stamp duty from 5% to 3% for properties priced between Rs 21 lakh and Rs 35 lakh.
“Real estate contributes around 7% to India’s GDP and we are looking at this growing to 14-15% in the future. Over 5.5 crore people are engaged in real estate related work. We are building a Chicago every year,” Mishra told developers at the NAREDCO-APREA realty conference while highlighting the importance of the need to support the sector.
Residential sales in Mumbai, the country’s most expensive property market, increased 36% year-on-year in October and surpassed the pre-Covid-19 level, driven by stamp duty reduction by the Maharashtra government and discounts offered by real estate developers.
In an indication of a robust revival, registration of apartments went up 34% from the level seen in February, showed data from the office of the inspector general of registration Maharashtra. October saw the fourth highest monthly sales in registration volume and value since April 2013.
The Housing Secretary also noted that the government is ready with the Model Tenancy Law that would bolster rental housing across the country. The law has been translated in regional languages and the government is now seeking feedback on the same from the public.
In June Mishra had said MoHUA was planning to soon approach the Cabinet for its nod to the Model Tenancy Law that would bolster rental housing across the country. The ministry floated the draft model tenancy law in 2019.
In July, the Union cabinet had approved the Affordable Rental Housing Complexes (ARHCs) scheme under Pradhan Mantri Awas Yojana – Urban (PMAY-U) to provide budget rental accommodation to poor and migrant workers in urban areas. This is estimated to benefit more than 350,000 people.
The government has already issued guidelines for this scheme and 24 states and union territories have already signed agreements with the central government to implement this in their respective states.
According to Mishra, the scheme has been receiving good response in key cities including Surat, Rajkot, and Chandigarh. In Jaipur, Baroda, Bahadurgarh and Bengaluru, three private entities have offered to build around 2,800 such houses.
The central government is extending several incentives including free floor space index (FSI), concessional project finance, and free-of-cost trunk infrastructure facilities to push participation in ARHC.
Under this scheme, state and civic bodies will select concessionaires through bidding, according to guidelines issued by the housing and urban development ministry.
Source: realty.economictimes.indiatimes.com