Your dream home will cost less

Your dream home will cost less

Buying immovable properties will become cheaper with Chief Minister D V Sadananda Gowda proposing to cut down the stamp duty on registration of sale deeds from six per cent to five per cent in the 2012-13 budget.

Property prices may also come down with the budget proposing steep reduction of stamp duty on Joint Development Agreement (JDA) and General Power of Attorney (GPA) from six per cent to one per cent (subject to maximum of Rs 15 lakh). Though this move will directly benefit the builders and developers, they are likely to pass it on to the buyers.

Vice Chairman of Builders Association of India, Bangalore M Ramesh said reduction in duty on JDA is a big relief to the builders. “It will also benefit the property buyers as we (builders) will pass it on to them,” he stated.

The duty on JDA and GPA had badly hit the sector. A large number of builders have either not registered the JDA and GPA or kept them pending for long time due to heavy stamp duty. According to an estimate, as many as 4,000 JDAs have been kept pending in Bangalore City alone. Starting April 1, all these builders will queue up before sub-registrar offices to execute JDAs and GPAs, officials explained.

Cut in stamp duty by one per cent on sale deeds will save a lot of money for property buyers. For instance, if a person is buying an apartment worth Rs 30 lakh, then he will have to pay Rs 2.10 lakh as stamp duty at the present six per cent. If reduced to five per cent, the buyer will pay Rs 1.80 lakh as stamp duty – less by Rs 30,000.

According to S Selva Kumar, who is an advocate on property matters, the budget proposals will give a big boost to the property market as both the property buyers and the builders will benefit. The JDA was too high for the builders. The reduction in stamp duty on JDA will not only benefit builders, but also earn decent revenue to the government.

Levy on ads and IPR

This apart, the chief minister has proposed to impose a new levy of 0.1 per cent on assignment of Intellectual Property Rights (IPR), agreements related to advertisement for business development and granting of exclusive rights of telecast.

As assignment of IPR includes IT softwares, IT firms will now have to pay stamp duty. Similarly, advertisement firms and broadcasting houses will also have to pay stamp duty for any agreements. Hitherto, such agreements had remained off the tax net. The fresh levy is likely to fetch about Rs 150 crore revenue to the government, officials said.

However, revenue to the government depends on effective implementation. It is extremely difficult to make two parties entering into such agreements to register their documents. For instance, not all rent and lease agreements are registered though it is mandatory.

Regularisation scheme resurfaces

The budget has announced the re-introduction of a scheme to regularise dwelling houses constructed unauthorisedly on government land in the State.

Chief Minister D V Sadananda Gowda has proposed to amend Section 94-C of the Karnataka Land Revenue Act. However, only those who do not own any residential site will be eligible to benefit under the scheme. Dwelling houses on government land in both urban and rural areas will be regularised.

According to official sources, the then government had implemented this scheme in 1998. The Revenue department will soon announce the cut-off date for filing fresh applications.

Besides, the budget has proposed to introduce a uniform index sheet as part of the sale deed documents with a view to bring in reforms in the property registration system.

The government has set a revenue collection target of Rs 5,200 crore under Stamps and Registration in the 2012-13 fiscal.

Big boost to real estate

* Stamp duty on sale deeds cut by 1% 

* Duty on JDA and GPA reduced to 1% 

* Duty on documents related to
pawn and pledges reduced to 0.1% from 1%

* New levy of 0.1 per cent on assignment of IPR and agreements of advertisement for business development

* Duty reduction on bonds to 0.5%

* Duty of Rs 100 being levied on Customs bond is proposed to be extended to Excise bond

* Currencies under the ‘Broker Note’ along with goods or commodities

* Levy of 0.1% duty on agreements of works contract (subject to maximum of Rs 5 lakh)

* On partnership deeds, the minimum slab of capital and stamp duty payable is proposed to be increased