Time to cut registration fees to boost realty: Telangana developers
Say reduction in stamp duty on lines of Maharashtra will spur property sales in Telangana
With the Maharashtra government reducing stamp duty on property registrations, real estate developers in Telangana are also seeking cut in property registration charges including stamp duty and other steps to support the real estate sector battered by the ongoing Covid-19 crisis.
"We have already submitted a memorandum to the State government requesting for a 50 per cent cut in property registration charges. Hopefully, it will heed to our request and reduce property registration cost as such move will greatly boost real estate sentiment and spur sales, thus providing much-needed relief to the real estate sector in Telangana," B Sunil Chandra Reddy, Secretary General, Telangana Real Estate Developers' Association (Treda), told The Hans India.
Last week, the Maharashtra government had effected two-way cut in stamp duty on property registrations to put its ailing real estate sector back on growth track. Accordingly, the stamp duty on property registrations has been reduced by three per cent till December 31, 2020, and by two per cent from January to March 2021. Before the cut, stamp duty charges were five per cent in major cities such as Mumbai and Pune, while six per cent in others. The move is expected to revive demand for properties in Mumbai, the country's biggest real estate market, and other parts of Maharashtra.
In Telangana, the Registration & Stamps Department collects six per cent of property value as charges for registration. These charges include stamp duty, transfer duty and registration fee. Additionally, there is also a user charge, though it is a small amount.
"Construction activity has picked up and inched toward 50 per cent of pre-Covid level as labourers have started coming back. But sales have not yet picked up on expected lines. A reduction in property registration fees will provide a much needed booster shot to the sector during these critical times," said Gummi Ram Reddy, Chairman, Credai Telangana.
Reddy pointed out that interest rates on home loans are at a historic low now. "Therefore, a 50 per cent cut in registration fees will give a further boost to the sector and encourage more people to buy properties, especially residential units," he added. We made a request to the State government in this regard. We are hopeful that some positive decision will come out soon, Reddy said.
The Credai Telangana Chairman explained that total income from property registrations would not go down even if the charges were brought down. "We are aware of the fact that the State government is not in a strong position financially. But lowering registration charges will not cause any dent to its revenues. If registration charges are cut, the number of registrations will definitely go up, thereby pushing up the income."
Besides seeking cut in registration fees, developers are asking for reduction in GST on properties. In its representation to the Telangana government, Treda sought 50 per cent reduction in GST on properties during the current financial year to help real estate sector tide over Covid crisis.