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States Should Reduce Stamp Tax and Registration Fee for Affordable Homes, NHB Study | India News

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NEW DELHI: A study conducted for the National Housing Bank (NHB) suggested that the state government reduce the stamp tax and registration fees for houses with low value for the poor (affordable housing) to induce more people from groups low-income to own such housing units. .
The study conducted by IIM, Bangalore has estimated that the income of the states will not be affected due to this, as they would generate more as several billion additional houses are expected to be built under Housing for All (HFA) with direct or indirect central subsidies. . The government has set a goal of ensuring that all urban households have a pucca house by 2022. The total estimate is around 1.02 houses in the low- and middle-income segments.
These charges are paid by buyers of land or built properties and range from 5 to 13% of the property’s transaction value. They generate a lot of revenue for state governments.
Advocating the need to reduce these charges, the report said: “Several billion additional homes are expected to be built under HFA with direct or indirect central subsidies. These houses will generate huge incremental tax revenues for states that are beyond normal growth in revenue from stamp taxes and registration fees as determined by economic activity. ”
It has recommended that states be able to share a portion of this additional tax revenue with buyers of low-value homes by reducing or eliminating their stamp duty and registration fees. Lower prices may induce more people to search for such affordable homes. Along with increases in home stock, lower prices are a must if HFA is to be successful. He also said that the volume of transactions or registrations can increase more than enough to offset the drop in transaction tax revenue, even as states reduce fees.
He said the HFA policy, which provides subsidies to people in low- and middle-income groups, does not address the issue of high prices directly and a key component of prices remains the taxes that state governments collect as stamp duties and registration fees at the time of a transaction.

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