The Orissa government’s decision to slash stamp duty from 7 to 5 percent has been very well received by property developers by property associations and builders here.
The stamp duty cut will be applicable to real estate projects, both residential as well as commercial, with retrospective effect from August 8, 2008, the date of notification of reduction.
“We welcome the estate government’s move to reduce stamp duty from 7 to 5 percent for multi-storied and apartments complexes,” said D.S. Tripathy , Secretary, Confederation of Real Estate Developer’s Association of India (CREDAI), Orissa chapter.
|
|
“ The government has reduced the stamp duty to encourage fair play in land or property transactions,” said Kali Prasad Mishra, joint secretary, Revenue department.” “People will now voluntarily disclose the real value of the property they are buying,” he added.
Earlier, Under the Orissa Development Authority (ODA) Act, three percent stamp duty used to be levied on a building worth 5 lakh, four percent on a building of Rs 5-15 lakh valuation and seven percent on buildings worth above Rs 15 laks.
Earlier, stamp duty was 11 percent (8 percent+3 percent additional surcharge) in town areas and eight percent in rural areas . Now it has been fixed at 5 percent for all areas.
Besides stamp duty reduction, CREADI-Orissa has also welcomed the government’s move to announce necessary amendment in the ODA ACT and the Orissa Planning and improvement Trust to repeal the additional surcharge of three percent on land and apartments.
The steps taken by the state government is in sync with the guidelines of National Urban Renewal; Mission to rationalize the stamp duty structure throughout the country. “At this time of economic recession, such steps of the government will certainly help stabilize the real estate sector in the state. This would also generate more revenues for the state exchequer and help curb the black money market, as earlier people used to keep property on “Power of Attorney’ basis or in reduced value price due to high stamp duty,” Said Tripathy. “The sale-purchase ratio (of property) will be 3-4 times higher now,” he added.
“Many states have already slashed stamp duty and their rates are varying between one to five percent. We hope the government will take necessary steps to cut stamp duty further to two-three percent in line with Delhi and Maharastra which have brought down stamp duty.” said a city-based builder.
Suggesting other measures that are needed to be taken by the government to boost real estate market here, many builders said that in the CDP (Comprehensive Development Plan) for Bhubaneswar, the government had proposed for a SRZ (special residential zone like SEZ). “If immensely benefit property buyers as there will be no taxation – be it service tax, stamp duty, income tax, municipality levy, etc.” said a builder.
Besides, the Bhubaneswar Development Authority has also taken a number of steps to fuel demand for the real estate sector, including announcement of its new building norms in December 2008 which permits building of high rise buildings. The latest building norms had done away with height restriction of apartment which was earlier pegged at 27 meters, allowed multilevel car-parking for commercial complexes and revised Floor Area Ratio (FAR) at 2.5 for housing projects and 2.75 for IT office space.
Earlier CREDAI-Orissa had announced a price cut of 10-15 percent in new projects to boost the sagging demand for residential projects in the wake of meltdown which had hit property transaction in the city by around 20 percent. |
