Home buyers in Goa will now incur an additional cost of approximately Rs 74,000 for property registrations, based on the property’s market value. This decision was made to bolster the state government’s dwindling income.
Increased Registration Fees
The state government has increased the property registration fee from 0.5% to 1% for properties in the affordable segment, valued between 50 lakhs and 75 lakhs. According to a notice issued by the law department, home buyers must now pay 3% of the property’s market value at the time of registration, applicable for properties valued up to 75 lakhs.
Currently, the registration fee is 2% for properties valued up to 50 lakhs, and 2.5% for properties valued between 50 lakhs and 75 lakhs. State government sources indicated that this increase aims to optimize registration fees. However, Credai believes it will significantly impact sales.
Exemptions and Demand Creation
The state government’s decision comes at a time when the real estate sector is experiencing a sharp decline in demand for apartments and flats. Builders and developers are advocating for a reduction in registration fees, or even lower stamp duties, to boost property sales.
Builders, led by Credai, plan to meet with the law minister to submit a representation, urging the authorities to reconsider the announcement. Credai will present the example of Maharashtra, which briefly lowered registration fees to stimulate demand.
COVID-19 Impact
The COVID-19 pandemic has severely affected the real estate sector, making apartments and houses more expensive and causing delays. Credai’s investigations revealed that this has impacted construction activity and delayed buyer purchases due to the second wave. Developers estimate that exemptions on stamp duty or reductions in registration fees could help create demand.
Market Impact
Nilesh Salkar, President of Credai Goa, stated that the hike in property registration fees is counterproductive and unexpected. While the government hopes to absorb the revenue, it is widely acknowledged that lowering taxes can result in higher revenue. Salkar believes this step will negatively impact the real estate sector and disrupt the market for the upcoming years. Simply put, this increment means that customers buying apartments valued under 75 lakhs will have to pay an additional 1% for registration.
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