Money & Banking

NHB to commission study on stamp duty in various States

KR Srivats New Delhi | Updated on January 17, 2018 Published on August 29, 2016

Sriram Kalyanaraman, MD & CEO

Reducing charges on property transactions will give a push to affordable housing: MD

National Housing Bank (NHB) will soon commission a ‘cause and effect’ study on stamp duties on property transactions across various States, Sriram Kalyanaraman, Managing Director & Chief Executive Officer, said.

Average stamp duty

The whole idea of the study would be to help build a case for the States to lower the stamp duty on affordable housing. As per NHB’s estimates, the average stamp duty (including registration fees) for housing under ‘affordable housing’ category ranged between 6 and 10 per cent, which is deemed to be on the higher side.

“We are looking at a cause and effect study so that when we go to the State Governments we can talk to them with data and convey to them as to how reducing stamp duties for affordable housing will benefit them. NHB’s view is that increase in registrations will offset any revenue loss from reduced stamp duty,” Kalyanaraman told BusinessLine here.

There is certainly room to reduce stamp duty for affordable housing projects, he pointed out.

“For an individual who has bought a house of say ₹10-12 lakh, the total outgo for registration should not be more than 2-3 per cent (say ₹20,000-30,000). That is the time he needs every bit of money on his house,” Kalyanaraman said.

NHB’s plan to undertake a study comes on the heels of the Urban Development Minister Venkaiah Naidu’s letter to Chief Ministers of all States urging them to cut stamp duty on affordable housing.

Kalyanaraman said that NHB would appoint a third party to undertake the cause and effect study on stamp duty.

Reducing approval time

The Government is working on multiple fronts to encourage affordable housing in the country. Besides looking to reduce the approval time for projects, initiatives are on to address finance costs as well.

Kalyanaraman said that NHB, along with Ministry of Housing and Urban Poverty Alleviation (HUPA), was looking to closely work with States on housing policies and take efforts to accelerate project clearances at the States’ level.

Published on August 29, 2016
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