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'Removing stamp duty cap in UP to further hurt realty demand'
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SME Times News Bureau | 14 Feb, 2020
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.
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