The Karnataka government's decision to reduce stamp duty on the registration of flats priced between Rs 35 lakh and 45 lakh from five per cent to three per cent is unlikely to give a significant boost to sales in Bengaluru, an expert said on Friday.
The fact is that housing demand in Bengaluru is largely skewed towards the mid-segment properties priced within Rs 50 lakh to Rs one crore, according to the Chairman of ANAROCK Property Consultants, Anuj Puri.
"For these properties, the stamp duty charges, unfortunately, remain unchanged at around five per cent", Puri said in a statement.
"The positive impact would be more visible in cheaper cities like Dharwad, Mysuru, Hubballi and Belagavi".
The decision on reducing the stamp duty was taken at the Cabinet meeting, chaired by Chief Minister B S Yediyurappa here on Thursday.
With this decision, Puri said, Karnataka joins the bandwagon of states which understand that this (stamp duty cut) is by far the single-biggest housing demand booster.
However, while the move is definitely welcome, it is not likely to give a significant boost to housing sales in Bengaluru similar to what was seen in Maharashtra, where the state cut stamp duty for homes across all budget segments and not just one category, he said.
Puri said in Maharashtra, the stamp duty cut made a massive positive difference to sales while it lasted, and this state is still feeling negative after-effects in terms of slower sales after the reduction period expired and was not revived.
West Bengal recently followed suit with a two per cent stamp duty cut coupled with a ten per cent reduction in "circle rates" which will work "wonders" for Kolkata's housing market, he added.