Housing board might talk states into slashing stamp duty & registration fees on houses

Housing Board, India’s apex financial institution for housing, wants home-ownership costs in India to fall. For this purpose, it is holding talks with state governments, in a bid to convince them to cut stamp duties and registration fees.

"We have engaged with some state governments on how they could reduce stamp duty for affordable housing," Sriram Kalyanaraman, MD of the National Housing Bank (NHB), told ET. "If they accept it, stamp duties and registration charges should come down significantly. Such a reduction will bring down their margin money and provide relief to many Indians, for whom owning a 'home' is still an aspiration."

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If the NHB successfully convinces state governments, stamp duties and registration fees might come down to 5-6% of the basic cost of the property. As of now, these rates go up to 12.5% in some states. This would also help the government in achieving its " Housing for All by 2022" objective, started two years ago.

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In order to achieve the pre-set target, 29.5 million additional homes need to be built by 2022.

As per Kalyanaraman, states can make up for their losses from reduced rates by the increases revenues from increased housing.

"Alternative sources of revenue from the housing sector need to be looked at," said Soumya Kanti Ghosh, the chief economic adviser at the State Bank of India. "To compensate the proposed reductions (stamp duty and registration charges), state governments could explore imposing value-added tax on luxury items, and on goods such as liquor. Such reductions will not only give shelters millions but also create jobs."