New Delhi, Feb 14 (IANS) With the Uttar Pradesh government announcing the removal of the upper limit in stamp duty, developers feel the move would further hamper the real estate sector which is already reeling from the impact of low demand and a liquidity crisis.
The Uttar Pradesh government on Thursday notified the new stamp duty rates on registration fees for property and other transactions under which the maximum cap of Rs 20,000 on transactions has been done away with.
The notification, however, lowered the stamp duty to 1 per cent. The new rule replaces the old one which levied the stamp duty at 2 per cent but capped it at a maximum of Rs 20,000 with a minimum slab of Rs 100.
"In the region like NCR where the bare minimum amount for a decent middle class apartment starts from Rs 40 lakh onwards in areas like Greater Noida and about Rs 1 crore approximately in the Noida region, this will be another setback to thousands of aspiring middle class homebuyers and will add to the woes of an already struggling real estate market of the region, since it is nothing but an added cost for homebuyers," said Amit Modi, Director ABA Corp and President-elect of CREDAI Western Uttar Pradesh.
According to Ashok Gupta, CMD, Ajnara India Ltd, although the latest changes may benefit properties valued up to Rs 20 lakh, but demand for properties above that price level would be severely hurt.
"The properties valued up to Rs 20 lakh may benefit from the recent stamp duty notification. This will help in boosting the demand of housing in tier-II and tier-III cities. However, it is probably going to have adverse effect on a market like the NCR as the buyers investing in property of more than 20 lakh will now be required to pay more stamp duty charges," he said.
"This will adversely impact the revival of the sector as increased prices will affect sentiments of the buyers," Gupta added.
Deepak Kapoor, Director of Gulshan Homz said that the lower stamp duty would help the economically weaker sections of society but would be a setback for those intending to invest in high-end property.
"The purchase and sale of property is anyway considered to be a high investment, but with this measure it is bringing relief to one section of society, while making it a not so easy investment process for the other," he added.
However, sector experts also feel that the move may not make much of a difference as buyers of luxury properties may not face an issue in paying higher stamp duty.
Ankit Kansal, Founder and MD of 360 Realtors said that the move would bring in transperancy and would regulate speculative buying.
"Luxury properties will get slightly expensive, but developers might give some discounts to compensate," Kansal added.