CHENNAI: Is the State government considering a reduction in stamp duty and registration fee to help the real estate sector, which is struggling owing to the pandemic? It is learnt that during a high-level meeting chaired by Deputy Chief Minister O Panneerselvam recently, the issue was discussed by Confederation of Real Estate Developers’ Association of India (CREDAI).
Finance and housing secretaries, member secretary of Chennai Metropolitan Development Authority and Director of Town and Country Planning also participated in the meeting. The sector has been struggling to come to terms after the 2015 floods. While there was optimism on revival in 2020, all hopes were dashed to the ground owing to the pandemic and the subsequent lockdown.
S Sridharan, CREDAI chairman, Tamil Nadu Chapter, told Express that the government is considering the request to reduce stamp duty and registration fee. In Tamil Nadu, the stamp duty (7 per cent) and registration fee (4pc) totals to 11 per cent.
“From 11 per cent (both stamp duty and registration charges), we have requested for reduction to five per cent stamp duty and one per cent registration charge permanently and, as short-term measure, we have asked reduction to 4 per cent stamp duty and one per cent registration charge till March 31, 2021,” said Sridharan. He said the government is looking into the request of CREDAI.
Developers are of the opinion that the stamp duty and registration fee, which now comes to 11 per cent, is the highest in the country. The need of the hour is to lower interest rates, which will help resolve the existing liquidity crisis and boost housing demand. Official sources said the issue will be discussed with the Commercial Tax Department and later briefed to Chief Minister Edappadi K Palaniswami for a decision. The key component of residential prices remains the taxes the State governments levy as stamp duty and registration charges at the time of a transaction.
These charges are paid by buyers of land or built property. Tamil Nadu has earned `1 lakh crore as revenue from stamp duty and registration charges between 1990 and 2018. Builders Association of India (BAI) State treasurer S Ramaprabhu tokld Express that the association has also been insisting on a reduction.
“In Maharashtra, they reduced the stamp duty till December 31 as relief measure.
We are urging the State government to reduce the stamp duty and registration charges till March 31. The stamp duty in Tamil Nadu is second highest in the country after Bihar. The reduction will help reduce the stock. In Maharashtra, due to stamp duty reduction, around 6,000 units got sold,” Ramaprabhu said.