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Breather for home buyers

Calcutta, Feb. 17: Property buyers would have to pay 6 per cent stamp duty, not 7 per cent, if their purchase costs no more than Rs 30 lakh.

The raising of the ceiling from Rs 25 lakh to Rs 30 lakh for a stamp duty of 6 per cent, announced by finance minister Amit Mitra in the budget, would benefit middle-income home buyers.

At present, buying property that costs over Rs 25 lakh attracts stamp duty of 7 per cent.

A back-of-the-hand calculation shows a buyer would save a maximum of Rs 30,000 on stamp duty, assuming the value of the property is Rs 30 lakh.

Industry observers said the announcement would benefit a large section of home buyers across the state as well as in some pockets of Calcutta.

“This is certainly a welcome move. It will give fillip to the real estate sector. Moreover, it will encourage people to come up to register properties bought earlier but which were not registered so far,” said Abhijit Das, the eastern region head of the international property consultancy Cushman & Wakefield.

Industry observers said apartment buyers in around 60-70 per cent stand-alone buildings in Calcutta could benefit since many may fall below Rs 30 lakh ceiling. The percentage of such properties outside Calcutta would be higher.

Stamp duty and registration of property is one of top five revenue earners for the state. According to the budget document, the Mamata Banerjee government is hoping to mop up Rs 5,399 crore in the next fiscal compared to Rs 4,499 crore expected this year. The state earned Rs 4,357 crore in 2012-13. Mitra expressed hope that the measure announced today, along with sops for registration of co-operative societies, would drive revenue forward.

Last month, the state government revised circle rates, the price at which stamp duty is paid, in many areas of Calcutta and Rajarhat.

Moreover, the state also allowed property owners in co-operative housing to pay stamp duty on the cost of construction of the individual unit instead of the circle area rate.

At present, co-operative flat owners have to pay stamp duty on the circle area rate even though they may have spent a fraction of it while building it. As a consequence, co-operative flat owners feel wary of registering their property. There are at least 80,000 such co-operative housing owners which have not done their registration.

The budget today also provided relief to property owners taking a second loan for repair of their house.

They now have to pay stamp duty of 4 per cent with no upper limit. Mitra in his budget proposed to restrict the stamp duty on the second mortgage to a maximum of Rs 1 lakh.

The budget today announced e-stamping of property registration in all 246 registration office in Bengal. So far, this facility was available in select offices of the Calcutta Municipal Corporation.

“This is a step in the right direction. It would reduce transaction cost and improve transparency,” Debanjan Mandal, partner of solicitor firm Fox & Mandal, said.

Buyers now can electronically transfer the stamp duty amount from their bank account. Today, owners are required to make a demand draft for paying the stamp duty.

PROMISES

Schemes proposed in the Bengal budget for 2014-15

Gatidhara, under which the government will give an unemployed person up to Rs 1 lakh for buying a vehicle. Allotted Rs 100 crore, the scheme is aimed at creating employment for about 50,000 families

500 Karma Tirtha market complexes for small and marginal traders at a cost of Rs 500 crore. Aim to benefit 1 lakh families

Widening of 1000km of state highways. Cost Rs 1,250 crore

An integrated powerloom park in Habra, North 24-Parganas, under the PPP model. The loom would create direct and indirect employment opportunities. The government will have 24 per cent stake. The investment would be Rs 150 crore

102 Krishak Bazars to be constructed, creating employment opportunities for more than 55,000 families. Project cost Rs 620 crore

Direct financial support for minor irrigation scheme for assistance to 1 lakh farmers for installing of source of water for irrigation. An allocation Rs 500 crore

Piped water supply scheme for 11 blocks in Purulia with assistance from the Japan International Cooperation Agency. Estimated cost Rs 588.83 crore. The project would benefit 12,67,385 people

Rs 100 crore allocation for 4.68 lakh power connections to above and below poverty line households

Micro Business Credit Cards from April 1 by SBI to assist entrepreneurs to get credit up to Rs 5 lakh for any licensed business

70 motels and development of new tourist destinations at Jharkhali in the Sunderbans, Gazoldoba in Jalpaiguri and Jhargram, among others

1 lakh direct and indirect employment in IT and ITES sector.