Bengal has extended by another six months 2 per cent reduction in stamp duty and 10 per cent cut in the circle rate with the hope that the sops will nurture the revival of the real estate sector.
The announcement was made in the budget presented by minister of state in charge of finance Chandrima Bhattacharya in the Assembly on Friday.
The ongoing 2 per cent rebate in stamp duty and 10 per cent cut in the circle rate will now continue till September 30, offering another window to homebuyers to register their properties at a lower cost.
The circle rate is the floor price fixed by the government per square foot.
This is the third extension of the sops which had been first announced in the budget in July 2021. The twin objectives of the proposal were to encourage buyers and also to kickstart the real estate sector which was hit by the pandemic badly.
Stamp duty now stands at 4 per cent and 3 per cent in urban and rural areas, respectively, for properties worth up to Rs 1 crore. The rate are 5 per cent and 4 per cent for properties worth over Rs 1 crore.
It appears that the age-old trick to boost consumption by lowering tax worked in this segment. The government is likely to earn Rs 6,990 crore from stamps and registration fee, up by 26.4 per cent from Rs 5,527.57 crore earned in 2020-21. If compared with 2019-20, the last fiscal before pandemic set in, the growth recorded in the ongoing fiscal in tax collection from this head is likely to be more than 16 per cent.
In her maiden speech in charge of finance portfolio, minister Bhattacharya said the extension was being done keeping the interest of homebuyers in mind.
Former finance minister Amit Mitra, who is now the principal chief advisor to the chief minister Mamata Banerjee, later explained that the tax sops would also create employment opportunities.
“The focus of this government is to encourage sectors which have potential to create employment. Real estate has a multiplier effect on the economy and it is also a big employer. The tax rebate will go a long way in achieving these objectives,” Mitra said, adding 20 lakh property deeds were registered after the sops were offered.
Welcoming the move in the state budget, Sushil Mohta, president of Credai West Bengal, the body of the developers, requested that the rebate in the stamp duty be permanently reduced by 2 per cent. “We also request the state to reduce the circle rate in Sector V and some parts of the suburbs permanently by 10 per cent,” Mohta added.
According to Arya Sumant, managing director of Eden Realty, the rebate translates into savings of Rs 50,000-1 lakh for buyers in the affordable segment and more for the higher price bracket properties.
Real estate sources said the rebate had encouraged many land and home owners to register their properties purchased before taking advantage of the lower tax regime.