Lower DLC rates enhance consumer demand. Previously, a buyer purchasing a flat costing up to 50 lakh faced a hefty total of 8.7% in stamp duty. However, with the recent reduction, buyers now face a much lighter burden of only 5.7%, which encompasses other taxes as well. This reduction is anticipated to significantly uplift the spirits of affordable home buyers.
In an effort to invigorate the demand from developers throughout the state, the Chief Minister has announced a reduction in stamp duties on residential units found within multi-story buildings. Effective until June 30, 2021, the stamp duty for these units has dropped from 6% to 4%. Notably, this benefit exclusively applies to purchasers acquiring an apartment priced at Rs 50 lakhs.
Additionally, stamp duty has also seen a decrease for EWS and LIG categories. Under the Affordable Housing Scheme, the stamp duty applicable to the Economically Weaker Section (EWS) and Low Income Group (LIG) has been lessened to 0.50% from its previous rates of 1% and 2%.
This initiative has garnered admiration from builders, buyers, and developers alike, who have collectively praised the government for implementing such a favorable adjustment to the DLC rates. While the overall market conditions may not witness a drastic transformation, a boost in demand and improved negotiation capabilities are anticipated as a result of this reduction.
Post-pandemic, there has been a marked surge in demand for housing within the EWS and LIG categories. The move to lower stamp duty is expected to enhance the overall morale of affordable home buyers. Moreover, this initiative by the government may lead to capital gains tax relief across the sector, particularly on property valuations falling beneath the DLC thresholds in various regions.
Expert Opinion:
Gopal Prasad Gupta, the chair of Rajasthan Credai, expressed his support for this governmental strategy, stating, “During the pandemic and lockdown period, the stamp duty increased from 5% to 6%, causing declines for both consumers and the real estate industry. The total stamp duty, factoring in the 1% registration fee and additional 30% in other taxes, surged to approximately 8.7%.”
Before this reduction, a consumer purchasing an apartment costing up to 50 lakh faced a total stamp duty of 8.7%. Now, with the lower rates, they will only incur a total of 5.7% including other taxes. This initiative not only cuts down the overall cost for consumers but also provides significant financial benefits to buyers.
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