Stamp duty cut fails to cheer Bengaluru realty firms

Our Bureau Chennai | Updated on March 08, 2021

Reduction will benefit only buyers up to ₹45 lakh

Share prices of Bengalaru-based realty firms witnessed a sudden spurt on Monday around noon as Karnataka government cut stamp duty. But the stocks could not sustain the gains and ended in the red, as analysts said the move will not have much impact.

The stock price of Sobha, which jumped to a high of ₹481.55, closed at ₹460.20, down 0.23 per cent against the previous day's close; Prestige Estates Projects touched a high of ₹304 but closed at ₹293.35, almost at day's low level of ₹292.55; and Brigade Enterprises surged to a high of ₹296.35 but closed 0.37 per cent lower at ₹285.

However, bucking the trend, Puravankara closed 6.65 per cent higher, almost at day’s high.

Karnataka, during the Budget presentation, said that it is reducing stamp duty charges to 3 per cent for homes valued between ₹35 lakh and ₹45 lakh.

“While the move does carry a feel-good factor and will strike the right sentiment chord, it is not likely to give a significant boost to housing sales in Bengaluru on the lines of what we saw in Mumbai. Maharashtra had reduced stamp duty for properties across all budget segments - not just one category," said Anuj Puri, Chairman – Anarock Property Consultants

“The fact is that housing demand in Bengaluru is largely skewed towards the mid segment, involving properties priced within the ₹50 lakh to ₹1 crore budget range. For these properties, the stamp duty charges remain the same at nearly 5 per cent,” he added.

Meanwhile, Maharashtra too announced a concession of 1 per cent for property registered in woman’s name under Rajmata Graha Swamini Yojana during the Budget presentation on Monday. However, Mumbai-based realty stocks fell such as Sunteck Realty, Indiabulls Housing and Oberoi Realty fell.

Published on March 08, 2021

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