The West Bengal government’s decision to reduce stamp duty by 2 per cent and cut circle rates will boost housing demand in the state and encourage investment, according to property developers and consultants.
In its budget, the West Bengal government has proposed to reduce stamp duty by two per cent for registration of deeds, while the circle rate was slashed by ten per cent.
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Welcoming the decision, realtors body CREDAI-West Bengal President Sushil Mohta said: “It is heartening to see that the West Bengal government has considered a long-standing demand for the real estate sector in West Bengal.”
He said it will help boost demand in the sector in this pandemic situation.
“The reduction in the rate of stamp duty should help the end-users and this should boost sales. We hope that the overall collection of revenues of stamp duty will also go up,” Mohta said.
This would encourage real estate sectors to launch new projects and infuse fresh investments in the sector, said Mohta, who is the Chairman of Merlin Group.
Amit Goyal, CEO, India Sotheby’s International Realty, said the property prices in many of the cities are actually trending below the prevailing circle rate and there is a case of reduction in circle rate.
“In this context, the Bengal government has done the right thing by reducing the circle rate by 10 per cent. As the move is also accompanied by a 2 per cent reduction in stamp duty, it will immensely help buyers and industry alike,” Goyal said.
The decision will have a positive impact on sales as it happened in Maharashtra, which cut stamp duty last fiscal year from September 2020 till March 2021, he added.
According to PropTiger’s report, housing sales in Kolkata fell to 1,253 units during April-June 2021 as against 1,317 units in the same period last year. The fall was steeper from 3,382 units in the previous quarter.
Emami Realty, which has a big presence in West Bengal, MD and CEO Nitesh Kumar said: “Bringing down stamp duty by 2 per cent and lowering the circle rate by 10 per cent is a very positive step to boost the housing and real estate sector along with nearly 250 related industries.”
Kumar said the overall cost for homebuyers will come down.
“The decision would encourage industry players to invest in the state as well as launch new projects,” he said.
“Real estate is one of the largest employment generators and this decision would also help create many jobs and in the revival of the state economy,” Kumar said.
Anarock Chairman Anuj Puri said the limited-period stamp duty cut in Maharashtra worked wonders for the real estate markets of MMR and Pune, causing housing sales to surge despite the otherwise crippling effect of the COVID-19 pandemic.
“A 2 per cent stamp duty cut along with a 10 per cent reduction in circle rates in West Bengal can replicate this feat on Kolkata’s housing market,” Puri said.