In order to revive the ailing realty sector, the Karnataka government on Tuesday came up with a big change. The registration stamp duty that was marked at 5 percent earlier, has now been reduced to 3 percent only, for properties costing between Rs. 21 Lakhs to 35 Lakhs. Properties costing up to Rs. 20 Lakhs will carry only 2 percent stamp duty as opposed to 5 percent duty earlier.
The budget was presented by the BJP government in which the Revenue Department officials were directed to reduce the stamp duty in order to keep the realty slump in check. This move will boost the volume of registrations and also help lower- and middle-class homebuyers.
COVID-19 and the subsequent lockdown has put a big dent in the state’s revenue earnings for the ongoing financial year, with the estimated loss set at Rs. 3,542 Cr. The major revenue-generating streams – property registration and vehicle registration – are suffering major setbacks, and this move may help revive the industry, spurring the demand in affordable and mid-income sections.
Homebuyers from cities like Mysuru, Mangaluru, Hubballi-Dharwad, Belagavi, and Kalaburagi will benefit the most from this stamp duty reduction, which will help them save up to Rs 3 Lakhs on stamp duty. However, the move will cost the state government Rs. 300 Cr annually.
A home buyer is supposed to pay stamp duty to the government at the time of registration of their property. This helps validate the home-buyer’s registration by the State Government; the duty varying from state to state and lying in the 2-7% segment.