Stamp Duty on Real Estate Slashed in Rajasthan

The Chief Minister of Rajasthan has announced a reduction in the stamp duty until 30th June, 2021. This reduced duty is applicable only on residential units of multi-storeyed buildings. Therefore, the present stamp duty stands at 4%, coming down significantly from the previous rate of 6%. Buyers who would be purchasing a new apartment worth up to INR 50 lakhs can benefit from this reduced rate.

The move from the government comes after the developers placed their request to reduce the duty. The chairman of Rajasthan CREDAI has appreciated the decision of the government. He stated that both the real estate industry as well as consumers experienced a setback during the lockdown. During that time, the stamp duty was increased from 5% to 6%. Besides, the overall stamp duty increased to 8.8%, considering other taxes and registration fees. Now that the rate has been reduced, property owners buying an apartment valued up to INR 50 lakhs would have to pay a stamp duty of 5.6%, including all taxes. Eventually, this would be beneficial for all buyers.

The stamp duty has also been reduced under the affordable housing scheme for the lower income group and economically weaker sections.  Presently, it stands at 1% and 0,50%, reduced from 2% and 1%, respectively. The demand for such properties has witnessed a manifold increment after the pandemic. With the stamp duty being reduced, property owners would get a boost in morale.

In Rajasthan, the government has also reduced the DLC rates. The developers, builders and property buyers have appreciated this decision of the government as well. However, it is unlikely that there would be any major change in the conditions in the real estate market as a result of this reduction. However, it would be easier to strike deals, as the DLC rates are tuned together with the lower rates in the market. Besides, the decision taken by the Rajasthan government will provide the real estate sector with a relief on capital tax gains.

During the pre-budget meeting, the CREDAI also wanted to minimize the rates of DLC, as it increased a lot in the last six years. After all, the DLC rates had to be corrected. Due to the reduced stamp duty and a corresponding boost in buyer sentiments, real estate sales in the state are likely to get a boost.