The state government’s decision to reduce the district lease committee (DLC) rates and stamp duty on housing units in multi-storey buildings (upto the cost of Rs 50 lakh) is expected to revive the sluggish real estate market as the move will boost sentiments and benefit homebuyers.
On the demand of the developers in the state, the CM announced to reduce stamp duty on housing units in multi-storey buildings from 6% to 4% until June 30, 2021. The benefit will be provided to buyers purchasing a flat worth upto Rs 50 lakh.
Welcoming the move, Rajasthan Credai chairman Gopal Prasad Gupta said, “During the lockdown, both consumers and real estate industry faced a setback after the stamp duty was increased to 6% from 5%. Also, with 1% registration fee and 30% other taxes, the total stamp duty had gone up to 8.8%. After the reduction, the consumers buying a flat upto Rs 50 lakh will have to pay total 5.6% stamp duty, including other taxes. The move would benefit the buyers financially.”
Similarly, under the affordable housing scheme, the stamp duty for the economically weaker section (EWS) and Lower Income Group (LIG) category has been reduced to 0.50% and 1% from 1% and 2%, respectively. “After the pandemic, the demand for houses under these categories has increased manifold. The reduction in stamp duty would boost the morale of buyers for houses that are affordable,” said Ankur Tiwari, an affordable housing developer.
Builders, buyers and developers have also appreciated the move to cut the DLC rates in the state. The reduction is unlikely to bring a substantial change in market conditions, but it is believed that bringing DLC rates in tune with reduced markets rates will give a better leverage to strike deals. Also, the government’s move will provide relief on capital gains tax for the sector as a whole, on property valuations which are below DLC in many areas.
The Credai in pre-budget meeting also demanded to reduce the DLC rates as it has touched the roof in past six years. “A correction in DLC rates was need of the hour. A differential between the DLC rates and agreement value, translates into tax penalties under Section 43CA of the Income Tax Act,” said Vikas Sharma, a developer.