August 31, 2020: The Housing and Urban Affairs Secretary Durga Shanker Mishra lauded the Maharashtra government’s decision to reduce stamp duty on registration of properties and suggested other states to follow suit to encourage demand in the real estate sector.
Things we covered for you
+
He assured the industry that the ministry would assess all the demands put forth by it, including the need for a change in income tax law to enable builders reduce their selling prices of apartments.
Read: INR 3,723 crore proposal by Delhi govt to develop unauthorised colonies
Book Best Packers & Movers with Best Price, Free Cancellation, Dedicated Move Manager
This is third
This is third
This is fourth
This is fourth
This is fifth
This is fifth
This is six
This is six
This is seven
This is seven
This is eight
This is eight
The secretary said an investment of Rs 9,300 crore has been approved from the Rs 25,000-crore stress fund, which was set up to complete the stalled housing projects across the country.
On the demand for stamp duty reduction to boost the sector’s recovery during this COVID-19 pandemic, Mishra said, “We had given suggestions to all the states to reduce it. The Maharashtra government has done it. We will pursue with others (states). It’s a good step by the Maharashtra government. It will have a positive impact on cost reduction.”
On Wednesday, the Maharashtra government decided to slash stamp duty on sale deed documents by 3 per cent from September 1 to December 31, 2020, and by 2 per cent from January 1, 2021 to March 31, 2021. Currently, the rate is 5 per cent in urban area and 4 per cent in rural area.
Stamp duty is the transactional tax, collected by the government on property purchases. It is one of the major sources of revenue.
If builders reduce prices more than 10 per cent below ready reckoner rates, there is an additional tax burden on developers and also buyers.
Mishra noted there has been substantial improvement in ease of doing business in the real estate sector and construction permits are being given online.
He also clarified that public sector companies and development authorities involved in building and selling real estate projects would have to be registered under the RERA law.
He stated that the newly launched Affordable Rental Housing Complexes (ARHC) scheme for migrants and urban poor would be a game changer in creating market for rental housing.
He also announced that the government has finalised model tenancy law and is likely to be approved in the next one month. It will then be sent to states/UTs for adoption.
The ministry had in July 2019 floated the draft model tenancy law, which proposed that landowners will have to give a notice in writing three months before revising rent. It advocated appointing a district collector as rent authority and heavy penalty on tenants for overstaying.
Read: RBI’s infusion of Rs 5,000 crore in NHB may improve liquidity and demand for real estate sector
Last month, the Union Cabinet approved this ARHC scheme, under which existing vacant government-funded housing complexes will be converted into Affordable Rental Housing Complexes through “concession agreements” for 25 years. ARHC is a sub-scheme under the Pradhan Mantri Awas Yojana-Urban.
The concessionaire will make the complexes livable by repair or retrofit and maintenance of rooms and filling up infrastructure gaps such as water, sewer, sanitation, road and related work.
