The stamp duty in Karnataka has been sizably lowered by the Government in a bid to boost the real estate sector in the State, particularly the affordable housing category.
Stamp duty in Karnataka has recently been lowered by the Government in order to provide a major boost to affordable housing in the State. Stamp duty has been lowered to 2% from 5% in case of new apartment units which are priced lower than Rs. 20 lakh. This will be deemed effective from the 1st of April 2020 and has already been confirmed by B.S. Yediyurappa, the Chief Minister of Karnataka. He has proposed a reduction on first-time new apartment/flat registration at this specific threshold. This statement was made by the Chief Minister when the State Budget was being presented for FY20-21 in the legislative assembly.
The stamp duty in Karnataka has been reduced after the collection of Rs. 10,248 crore by the revenue department of the State till February this year. This is approximately 87% of the annual target which stands at Rs. 11,828 crore for FY2019-20 as per reports. The target for revenue collection in FY20-21 has been kept at Rs. 12,655 crore. Yediyurappa has also stated that online registration for NBFC and bank loan documents will also be enabled via the national e-Governance Service Limited and the payment of stamp duties can be done online from the new fiscal onwards.
Key details that you should know
The Kaveri software will be easily integrated with e-Aasthi (property) applications of the State Urban Development Department. The software is deployed by the stamps and registration department. The Kaveri-2 software will be developed for registration of immovable documents of properties according to the Chief Minister. Stamp duty in Karnataka has already been lowered to 3% for units which have prices between Rs. 21-35 lakh. Properties priced above Rs. 35 lakh will attract stamp duty of 5% and registration charges will remain absolutely unchanged. This comes over and above the previous reduction in stamp duties for affordable housing units priced up to Rs. 20 lakh.
In Bangalore, for instance, you will be paying the prevalent rate of 5% as stamp duty in Karnataka for a unit priced over Rs. 35 lakh along with 1% of the registered/total value of the property as your registration charges. The registration charges remain the same for all property categories and so will the stamp duties. There will be a 10% cess and 2% surcharge on stamp duty as an additional cost. In urban areas, buyers will be paying 5.6% as stamp duty while areas under Village Panchayats will have 3% surcharge and total stamp duty values of 5.65%.
Stamp duty in Karnataka- Calculation methods
Stamp duty in Karnataka is calculated on the basis of various standards. The super built-up area will be taken into account for calculating the same in case of multi storied apartments. For plots of land, the sq. ft. area will be considered, and it will be multiplied by the current guideline value that prevails for that particular locality. In case of independent homes, the overall constructed area will be considered for working out the stamp duty.
The rates of stamp duty in Karnataka do not remain fixed and will change on a periodic basis. However, being aware of the same will always help you plan out your expenditure for purchasing a property. Additionally, the recent reductions in stamp duty will incentivize a larger number of buyers in the affordable and mid-income segments while boosting the Karnataka real estate sector at the same time.