Major relief for apartment buyers in Uttar Pradesh

Stamp duty levied on registration of property likely to be reduced soon

The Uttar Pradesh government is contemplating relief for apartment buyers. The stamp duty levied on the registration of property is likely to be reduced soon. The relief will be in the form of exemption from double taxation on the cost of land. Currently, the stamp duty is imposed on both coloniser and buyers.

Now the stamp duty on flats/apartments is proposed to be reduced to 5 per cent from the present 8 per cent of the cost of the flat. The stamp duty at 10 per cent is levied on the cost of the land and 8 per cent on the cost of the flat.

As per the prevailing duty structure, the coloniser pays the stamp duty when the construction firm buys the land. The stamp duty on the land is also levied on buyers of flats in multi-storeyed residential buildings. Now buyers of flats are proposed to be exempted from the stamp duty on the land.

With the approval of this proposal, the cost of the land will not be included in the valuation of the apartment at the time of the registration of the property in favour of the flat-owner. The proposal is before the cabinet and is likely to be endorsed in the next meeting.

"The demand for apartments within municipal limits and posh areas is shooting up, resulting in a disproportionate increase in prices of the flats," said Atul Chaturvedi, principal secretary, taxation and stamps.

He said, "The government is charging double stamp duty on the flats. The coloniser/builder pays the stamps duty as per the circle rates on the land he acquires for constructing the multi-storeyed building and then the construction firm includes the price of land in cost of the flat, resulting in double duty."

Chaturvedi said the present stamp duty charged on the registration of flats was unjustified.

He said in the cost of the flat, 60-70 per cent was the cost of the construction and the rest was the cost of the land. He said with the high cost of the registration of property was a major deterrent for the people from registering the property ion their favor.

"A large number of flat owners have taken possession of the property without registration in their favor thus depriving the government of the huge revenue on account of stamp duty'', said Atul, adding "reduction in stamp duty on flat would encourage such flat owners to get the property registered in their favor and good revenue for the state exchequer''.