Affordable houses may soon be exempt from stamp duty, which varies between 4% and 8% of the transaction value.
Union minister for urban development and housing M Venkaiah Naidu said that his ministry has written to state governments to exempt affordable houses from stamp duty .Stamp duty is a state subject, with the state government fixing the rate and collecting the duty.
Addressing Credai, the Confederation of Real Estate Developers’ Associations of India, the minister said that the Center would ensure that there was no net tax escalation in the housing sector, particularly the affordable housing segment, following the implementation of the goods and services tax (GST).
He said that the inclusion of the real estate sector in the GST framework would help the industry .
Affordable housing is exempt from service tax, which is around 5.35% of a property’s selling price. He said his ministry had already taken up with the finance ministry the need to continue the exemption under GST. He added that his ministry had also recommended to the finance ministry that the sector be taxed at a rate which is revenue neutral, and not a higher one.
The minister expressed his helplessness vis-a-vis the exclusion of stamp duty from GST, saying, “States have, in their wisdom, not adhered to the inclusion of stamp duty under GST.“ “Thus, we need to move forward from this debate,“ he said.
`Only new projects in new law ambit’
Credai has demanded that ongoing projects be kept out of the new real estate law, drafted amid outrage over delayed projects. Union minister M Venkaiah Naidu replied, “I wish I could transfer all my emails to Credai and let some panel address those issues…take corrective actions and then I can tell them, (the law will be) prospective and not retrospective.“