The West Bengal government has announced the withdrawal of the temporary relief measures provided to the real estate sector that includes a 2% reduction in stamp duty and a 10% cut in the circle rates, effective from July 1.
These benefits were introduced on October 30, 2021, after the economic slowdown caused by the COVID-19 pandemic and were extended several times.
The last extension was valid until June 30 this year.
“The matter has been reviewed further and considering all aspects, the governor, in the interest of public service, has now been pleased to decide that both the schemes for remission of stamp duty and reduction in circle rate shall be discontinued with effect from July 1,” a government circular said.
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Abhijit Das, Senior Director-East, Knight Frank India, said, “West Bengal government’s decision to end the stamp duty rebate and circle rate may be to reassess its impact on property registrations. They might have analyzed the data and realized that there are fewer unregistered transactions left, making the reduction in rates less beneficial.”
By monitoring the registration trends for a few quarters, they can make an informed decision on whether to reinstate the rebate or continue otherwise. This strategic move may be aimed at maximizing revenue from new sale registrations, he said.
Sushil Mohta, president of CREDAI West Bengal and chairman of Merlin Group, expressed gratitude to the state government for the relief measures but also urged the administration to reconsider the latest decision.
“It benefitted the pandemic-ridden real estate segment which was the second highest employment generator and a substantial contributor to the state exchequer. In 2023 the sector contributed ₹7500 crore on registration of properties to the exchequer,” he said.
He urged the government to consider revising the circle rate to help the sector reevaluate the pricing of residential units.
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“We would urge the government to consider a revision in circle rate which would help the sector reevaluate the pricing of residential units. Since the response from people had been good on the stamp duty rebate, we would urge the state to reduce stamp duty to a certain extent. We hope the sector is resilient enough to continue its growth trajectory with increased urbanization and rising disposable income of the people,” he said.
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