State Cabinet slashes registration costs

Stamp duty cut for flats with a plinth area up to 1,200sq.ft

The State Cabinet at a meeting on Wednesday decided to scrap the entire five percent stamp duty levied at the time of registration. This decision was taken with a view to reviving the construction activity that is going through a slump. Registration of apartments with a plinth area up to 1,200sq.ft will be cheaper in the State for two years with effect from January 1, 2009. Sources says, that this concession will be extended to all flats, measuring 1,200sq.ft and less till December 31, 2010. With this decision, the buyers have to pay 2.5 per cent on the value of the apartment towards registration charges as against 7.5 percent as of now. It will also include transfer duty and registration cost.

Speaking to media persons, the Minister for Information A Ramanarayan Reddy said that the Cabinet also resolved to exempt builders of housing units with a plinth area up to 1,200sq.ft from payment building approval fee and building permission fee up to June 2009. In another incentive, it was decided to allow builders to pay impact of fee in case of structures proposed above 15 meters height in six installments during the construction period. However, the builders have to begin construction within six months of getting approval and complete the construction within two years to get these fee exemptions and installments payment benefit. He added that the Cabinet took these measures to incentivise activity that was on a slow down following global recession resulting in slump in private investment. The Inspector General, Registration and Stamps, B Aravinda Reddy said property registrations in the State dropped by twenty five percent. The Minister said the incentives ensure housing to middle class and at the same time avoid layoffs in cement, steel and other related industries.

Real estate prices have seen an enormous boost for the past two years or so but have got hit hard after the global economic turmoil and the subsequent start of the slowdown phase. In fact, the lands and buildings registration charges in municipal corporation limits have been hiked in February 2008 and the Stamps and Registration Department went on to increase its revenue targets only to get into a re-thinking mode now because of the economic conditions. One earlier such attempt to bring down registration charges is made in April 2005 when the Government though that the registration charges are very high.

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