HomeReal Estate NewsKarnataka stamp-duty cut won’t help the Bengaluru home-buyer; here’s why

Karnataka stamp-duty cut won’t help the Bengaluru home-buyer; here’s why

The Karnataka Government’s decision to slash stamp duty from 5 percent to 3 percent for homes priced between Rs 35 lakh and 45 lakh may not make much difference to you if you’re a homebuyer on the look-out for a decent apartment in Bengaluru.

Profile image

By Jude Sannith  March 9, 2021, 5:45:18 PM IST (Published)

Karnataka stamp-duty cut won’t help the Bengaluru home-buyer; here’s why
The Karnataka Government’s decision to slash stamp duty from 5 percent to 3 percent for homes priced between Rs 35 lakh and 45 lakh may not make much difference to you if you’re a homebuyer on the look-out for a decent apartment in Bengaluru. The first reason is simply this: Bengaluru doesn’t have too many apartments in the price range subjected to the duty-cut.


According to data from Anarock, Bengaluru’s total unsold stock stands at 59,350 units across all segments. Of this, merely 24 percent comprises homes priced upto Rs 45 lakh. A far more significant 64 percent of the city’s unsold inventory lies between Rs 45 lakh and Rs 1.5 crore price range. The stamp duty applicable to these price-points remains at 5 percent. The government’s duty-cut could have had a bigger impact if it applied to this range, as opposed to the sub-45-lakh-rupee category.

“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,” says Anuj Puri, Chairman, Anarock, “The fact is that housing demand in Bengaluru is largely skewed towards the mid-segment, involving properties priced between Rs 50 lakh to Rs 1 crore. For these properties, the stamp duty remains at 5 percent.”

Karnataka’s move to slash stamp duty was made as part of the state’s budget announcements and comes on the back of Maharashtra doing the same, in order to revive the housing market. However, Maharashtra’s stamp-duty cut applied to all price-points and not just one category. It is precisely here, developers feel, the Karnataka Government may have missed a trick.

Speaking exclusively to CNBC-TV18, Pavitra Shankar, Executive Director, Brigade Enterprises said that the government could have included properties above Rs 45 lakh, and ideally upto Rs 1 crore if it really wanted to make a difference, “That is where the true demand for real estate lies, in Bangalore,” she added.

Puravankara’s managing director, Ashish R Puravankara agrees. “It would have been a delight if the same reduction was applicable across all the segments and not restricted to only houses ranging between Rs 35 and 45 lakh,” he said. However, some solace, Ashish believes, can be found in the possibility of the announcement boosting sales of affordable homes. “This decision will boost the demand for affordable houses in the state and encourage newer projects in this category thereby further motivating the buyer with more options to choose from,” he added.

Real estate services major and advisor, Savills India believes the move could also help developers get sluggish inventory off the shelf. “This decision will help them boost sales and sell existing inventory, which has been available due to sluggish sales during the pandemic,” said Sarita Hunt, Managing Director (Bangalore), Savills India.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!