After Arun Jaitley wooed middle class home buyers with a bonanza in the Union Budget, it is time for Amit Mitra to dangle the carrot. The state government on Friday offered incentives to encourage timely registration of properties instead of delays that run into years and hold up stamp duty and registration collection that amounts to nearly Rs 4,000 crore a year.
Presenting the state budget, finance minister Amit Mitra offered a 20% rebate on registration fee if buyers do so within a year of the project completion. With registration fee at 1% of the property value, the buyer of a property valued at Rs 50 lakh can save 0.2% or Rs 10,000.
Mitra also eased the payment condition for registering the sale agreement. At present, very few buyers get the agreement registered as they had to then pay 7% stamp duty even when construction hadn’t begun yet. Mitra has now proposed registration of the agreement against 2% stamp duty and offered buyers four years to pay the balance 5%. During the four year period, the valuation of property will remain unchanged. If, however, the balance is paid after four years, the 5% will be according to the new valuation. All projects launched after January 1, 2015, can avail of this benefit.
On a flat of Rs 50 lakh, a buyer has to now pay Rs 1lakh instead of Rs 3.5 lakh at the time of registering the sale agreement. On the Rs 2.5 lakh, a home buyer can earn Rs 17,500 a year through interest in bank deposit or Rs 70,000 before making the payment at the end of the fourth year. Thus a buyer of Rs 50 lakh property can save up to Rs 80,000, including the saving of Rs 10,000 as re bate on registration fee.
The second proposal is expected to facilitate greater compliance with the Real Estate (Regulation and Development) Act, 2016, that requires registration of the sale agreement to make the document legally tenable.
Mitra has also allowed change of the owner’s name to a family member without having to incur additional expenditure.
Welcoming the twin proposals, Credai Bengal president Nandu Belani said they would encourage home buyers to complete the formalities early instead of waiting for years to delay payment of stamp duty and registration fee.
Credai had proposed the buyers be charged 1% of stamp duty while registering their agreement and five years to pay the rest. Credai had also suggested the state charge Rs 5 lakh to convert an acre of agriculture land for real estate development instead of Rs 1.85 lakh as conversion charge and earth filling fee apart from a stamp duty on presumptive use. But Mitra has not acted upon it. “The twin proposals will further ease the financial burden on middle class families buying homes,” said Credai past president Sushil Mohta.
Source: The Times of India