West Bengal withdraws 2% stamp duty cut and 10% circle rate reduction from July 1, 2024. Experts weigh in on the impact and future implications.
West Bengal Ends Temporary Real Estate Relief Measures
The West Bengal government has decided to discontinue its temporary relief measures for the real estate sector, which included a 2% reduction in stamp duty and a 10% decrease in circle rates. These measures, introduced on October 30, 2021, to help the sector recover from the COVID-19 pandemic, will no longer be in effect starting July 1, 2024. The relief measures had been extended several times, with the last extension expiring on June 30, 2024.
In a government circular, it was stated, “The matter has been reviewed further and considering all aspects, the governor, in the interest of public service, has now been pleased to decide that both the schemes for remission of stamp duty and reduction in circle rate shall be discontinued with effect from July 1.”
Experts’ Views on the Policy Change
Industry experts have mixed opinions on this decision. Abhijit Das, Senior Director-East at Knight Frank India, suggested that the government might have ended these reliefs to reassess their impact on property registrations. “They might have analyzed the data and realized that there are fewer unregistered transactions left, making the reduction in rates less beneficial,” Das explained. He also noted that the government could monitor registration trends over the next few quarters to decide whether to reinstate these measures or maintain the current stance. This strategic move could be aimed at maximizing revenue from new property sales registrations.
Real Estate Sector’s Response and Concerns
Leaders within the real estate sector have expressed both gratitude and concern regarding this policy shift. Sushil Mohta, President of CREDAI West Bengal and Chairman of Merlin Group, thanked the government for the relief measures that helped the sector during the pandemic but also urged the administration to reconsider the latest decision.
“It benefitted the pandemic-ridden real estate segment which was the second highest employment generator and a substantial contributor to the state exchequer. In 2023, the sector contributed ₹7500 crore on registration of properties to the exchequer,” Mohta highlighted.
Mohta also called for a revision of the circle rates to aid in reevaluating the pricing of residential units. “Since the response from people had been good on the stamp duty rebate, we would urge the state to reduce stamp duty to a certain extent. We hope the sector is resilient enough to continue its growth trajectory with increased urbanization and rising disposable income of the people,” he added.
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