The representatives of the real estate sector during a recent meeting of the Central Valuation Committee (CVC) urged the government to extend the scheme providing a reduction of 10 per cent on property guidance value for another three to six months. Notably, the government announced the guidance value discount for three months starting January and later extended it till July 25.
Real estate developers argued that potential customers might not prefer to buy properties during Ashada Masa, which is considered inauspicious for making investment or buying property by a section of society.
Bhaskar T Nagendrappa, president, CREDAI-Bengaluru, said: “During Ashada Masa, the business would not be so great for the real estate sector and reduction in the guidance value has already paid dividends. The government should consider extending it for a few more months which will help business as well as increase revenue for the government.”
While the guidance value is the minimum selling price of a property based on the locality, the government earns revenue by imposing stamp duty and registration charges as a percentage of the amount. The properties priced below Rs 45 lakh attract 3 per cent stamp duty, while others attract 5 per cent in addition to 1.5 per cent registration charges.
The reduction in the guidance value makes a significant difference in terms of cost of property purchase. For instance, a buyer will save about Rs 65,000 when he buys a property worth Rs 1 crore as the duty and registration charges of the property are calculated at Rs 90 lakh.
About 1.8 lakh documents were registered in April fetching Rs 1,276 crore as against the monthly target of Rs 1,089 crore. This is compared to the average monthly figure of Rs 582 crore generated between 2019-20 and 2021-22. In June, 2.21 lakh documents have been registered till date garnering a revenue of nearly Rs 1,200 crore. The total revenue collected by the stamps and registration department in the first quarter this year was Rs 3,466 crore compared to Rs 1,510 crore garnered in the corresponding period last year.
