Stamp duty cut: Home sales surge in Kolkata

The rebates have helped encourage people to go for registrations.

The reduction of stamp duty and circle rates by the West Bengal government between July and October has led to a rise in sales of residential units in the Kolkata Metropolitan Area. Apartment sales during the January-October period have almost doubled on a year-on-year basis.

A total of 39,832 residential sales deed were registered during the January-October period compared to 19,876 deeds a year ago, data sourced by Knight Frank India from the state’s directorate of registrations and stamps revenue showed.

Developers are confident of a further rise in sales as the state government has now extended the reduction period from November till January 31, 2022.

In July 2021, the state government in its budget had announced a 2% stamp duty discount for registering all documents and a reduction in circle rates by 10%. This was aimed at stimulating demand in the housing segment.
Also, the measures were aimed at increasing the state government’s revenue through rise in the volume of transactions.

Shishir Baijal, chairman, Knight Frank India, said, “The recent buoyancy in residential market is a direct result of the stamp duty cut introduced in July 2021 by the West Bengal government. Encouraged by the recent extension of the stamp duty rebate till January 31, we are confident that the ongoing festive season will see a greater momentum from home-buyers.”

Welcoming the developments, Credai West Bengal president, Sushil Mohta, said low home loan rates along with the effect of Covid already motivated people to buy their own houses in gated communities. The 2% reduction in stamp duty and a reduction in circle rates by 10% triggered fence sitters to complete registration. This facilitated clearance of inventories and developers are motivated to launch new projects.

Mohta, who is also chairman of the Merlin Group, noted that extending the rebate on stamp duty by three months is a booster dose for buyers as well as developers. Besides there is still a latent pent up demand for new inventories among buyers.

“Reduction of stamp duty and circle rates by the state government became the catalyst and led to a two to three-fold increase in registrations in Kolkata. Additionally, we have seen a lot of demand from NRIs who were fence sitters and are now taking active steps for their future security,” he added.

Sureka Group managing director, Pradip Sureka pointed out that during the Covid period (last four quarters) before this reduction, ready to move in inventory (RTMI) was doing very well. The rebates have helped encourage people to go for registrations.

“There has been a mind shift towards owning property. People who were earlier looking for a 2 BHK are now looking for 2.5 or 3 BHK. We sold all our stock during the past one and a half years. Now we have a lot of pressure on registrations. The government is not able to cope up with the registrations and that’s the level of demand that has come up,” he added.