If you are delaying your plans to buy a property then the recent cut in registration charges in Bangalore provides you an investment opportunity to leverage.
Karnataka Government has given a leg up to the realty sector by reducing the property registration charges in Bangalore. The state government has reduced the registration fee from 5 percent to 3 percent for flats costing less than ₹20 Lakh. This registration rate also applies to industries investing in a property.
This fee cut in registration charges would help a new buyer save up to ₹40,000. However, the availability of enough flats in the price bracket of upto Rs 20 Lakhs is still a concern. However, the decision will supposedly rack up demand in the affordable housing sector.
Earlier this year, the government had reduced the stamp duty charges to 3 percent from 5 percent for properties priced between Rs 21-35 Lakhs while in 2019 it was brought down to 2 percent for properties priced upto Rs 20 Lakhs. Here's a peek into the changes in the stamp duty in Bangalore.
|If the Buyer is Male, Female, or a Joint Owner||5% for Properties Above ₹35 Lakhs|
|3% for Properties Between ₹21 Lakhs and ₹35 Lakhs|
|2% for Properties Less Than ₹20 Lakhs|
Calculating property registration charges in Bangalore involves diverse standards. For instance, calculating the registration charges in multi-storied apartments includes the super built-up area. However, in the case of plots, the area of the plot is multiplied by the current guidance value of that area. For independent houses, the total built area is estimated.
Surcharge on Stamp Duty
In case, a buyer is spending above ₹35 Lakhs to buy a property in an urban area then the property will attract a cess of 10% along with a surcharge of 2%. However, in rural areas, buyers have to pay a surcharge of 3%.
Registration Charges in Bangalore and Upward Swing for the Realty Sector
The reduction in the registration charges in Bangalore will help home buyers to realise their dreams of owning a home and therefore boost revenue from property registrations. The government also anticipates recovering the losses caused by the postponed property purchases. This move will not only encourage the buyers but also stimulate the COVID-hit housing sector.
Before the COVID-imposed lockdown, 88,450 flats were ready for registration as per the Federation of Karnataka Chambers of Commerce and Industries (FKCCI). As soon as the restrictions were lifted around 8,000 flats were registered, which lead to a jump in government revenue from ₹30 Crore in April 2020 to ₹398 Crore in May 2020. The revenue climbed up to ₹746 Crore in June 2020 after limping down to ₹607 Crore in July 2020 post a week-long lockdown.
The registration charges vary with the prevailing market rate and property market conditions. The reduction in registration charges will surely lower the burden on prospective home buyers. This coupled with the reduced stamp duty charges is an opportunity for the Bangalorehsouing market to bounce back. Buyers can now hope to get the best prices in the real estate market as there was no business for builders during the lockdown. Apart from that, investing in real estate will also help to keep the economy stable and running.