Property buyers pay for Govt's gazette gaffe

Property buyers pay for Govt's gazette gaffe

Instead of mentioning the the stamp duty on sale agreement as 0.1 per cent as announced in 2010-11 budget, the printed gazette notification mentions it as1 per cent. Sale agreement is entered between the seller and the buyer of a property before going in for actual property registration.

“The sub-registrars across the State are going by the gazette notification dated March 31, 2010, which has given effect to the budget proposal,” official sources said.

For instance, the buyer of a flat worth Rs 20 lakh, will have to pay Rs 20,000 as stamp duty for registering the sale agreement document at 1 per cent rate, whereas as per the actual rate of 0.1 per cent, the duty payable is only only Rs 2,000.

Prior to April 1, 2010, the stamp duty rate on sale agreement was 0.25 per cent of the total amount of property. In its budget 2010-11, the State Government cut the duty to 0.1 per cent or minimum of Rs 500 and maximum of Rs 20,000. The decision was aimed at bringing in the much-needed rationalisation of the stamp duty to help the ailing real estate sector.

But the department while amending the section 5(e) of the Karnataka Stamp (Second Amendment) Act, 2010, has stated: “One rupee for every one hundred rupees or part thereof on the market value equal to the amount of consideration subject to a maximum of rupees Twenty Thousand but not less than rupees five hundred.” Instead, the department should have mentioned “one rupee for every one thousand” rupees.

“This simple mistake is proving very costly for the property buyers,” S Selva Kumar, an advocate specialising in property matters, said. More importantly, it is not serving the purpose of the Government to bring in reforms in the sector. The government cut the stamp duty to encourage people to register the sale agreement, he said.

The department had committed a similar mistake last year. It had failed to reduce the stamp duty on registration of apartments as announced in the budget, forcing people to pay more.

When contacted, Inspector General of Stamps and Registration S N Jayaram said he is not aware of the faux pas but will look into it.