Emulating its immediate neighbour Maharashtra which saw major boost in sales due to limited-period stamp duty cuts last year, Karnataka decided to reduce the stamp duty charges to 3% for homes valued between INR 35 lakh to INR 45 lakh. This was revealed during the current state budget announcements.
While the move does carry a feel-good factor and will strike the right sentiment chord, it is not likely to give a significant boost to housing sales in Bengaluru on the lines of what we saw in Mumbai. Maharashtra had reduced stamp duty for properties across all budget segments – not just one category. The fact is that housing demand in Bengaluru is largely skewed towards the mid segment, involving properties priced within the INR 50 lakh to INR 1 Crore budget range. For these properties, the stamp duty charges remain the same at nearly 5%.
As per ANAROCK Research, Bengaluru presently has total unsold stock of nearly 59,350 units across all budget segments. Of this, just 24% is within the INR 45 lakh price bracket, while 64% is within INR 45 lakh to INR 1.5 Cr budget range. In other words, the cut within INR 35 lakh to INR 45 lakh budget may not have a significant impact.