Realty Biggies Allowing Revolution in Industry

December 13, 2006	(Be the first to rate this story!)  Loading ...
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Stamp duty on sales of property is likely to see a fall with the central government suggesting that the levy should be imposed only on capital appreciation. If the proposal gets passed, buyers will be required to pay stamp duty on the difference between the transaction value and the previous property sale.

The issue has been seeing annoyance of Indian property buyers and mortgage financiers since long. They take it as unfair on the part of government to collect duty on its entire value when the stamp duty has already been paid on a given asset. However, this is the procedure that is always followed to evaluate the amount of stamp duty, leading to high entry load of 15% on property acquisition in India or rampant duty evasion by shirking the price. Automation of real estate transactions helps to embark upon the evasion.

Stamp duty falls under the category of state subject and states are reluctant to rationalize stamp duty and registration charges. Also, this is clearly underlined from the wide variation in stamp duty rates across the country. There are some factors that are considered to possess the potential to drive significant changes in the real estate business. The more flourished states have seen a big jump in stamp duty collection, chiefly due to a large increase in mortgage-backed purchases.

Pressure from foreign investors eyeing to dig out high returns on their investments is believed to be one of such factors driving overdue reform. Realty biggies have always tried to roll the ball in their court with the force of their considerable political power to oppose any reform taking place in realty market. For that reason, the realty has always been regarded as a hunting ground for the developers to make wealth.

Indian developers seeking large foreign investment have now realized that they must allow the government to bring about new rules in the construction industry to allow transparent transactions. This is because; the government is now serious about chalking out realty reforms and may finally set up an independent regulator for the realty business.

News Published Under:   Real Estate India |

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