TN government’s stamp duty hike puts strain on home buyers: CREDAI Chennai

July 18, 2023

Tamil Nadu government’s recent announcement on increasing the stamp duty and property registration charges have impacted the home buyers putting a strain on the affordability and accessibility of housing, saysto S Sivagurunathan, President, Confederation of Real Estate Developers’ Associations of India (CREDAI), Chennai. 

He was addressing a press conference on “The implications of increased registration charges for home buyers in Tamil Nadu” on Tuesday.

On July 8, Tamil Nadu government passed an order revising the stamp duty from a flat fee to 1 per cent of the market value of the property, while registration charges for construction agreements have increased from 1 per cent to 3 per cent with effect from July 10.

According to CREDAI Chennai, the sudden increase in stamp duty and registration charges has created a significant financial burden for home buyers, forcing them to pay the additional amount from their own funds as leading banks are not prepared to provide immediate support for the increased registration charges. As a result, property registrations have been delayed, affecting both under-construction and ready-to-occupy projects.

S Sridharan, Vice President, CREDAI National South Zone, said, reducing the charges to a nominal level will alleviate the financial burden on home buyers, promote the redevelopment of apartments, and encourage new home buyers to invest in properties. 

According to CREDAI, first-time home buyers, in particular, may face challenges due to this increase, affecting their purchasing power. “An average middle-class family buying an apartment worth ₹50 lakh will now be required to pay an additional ₹1 lakh. This increased cost will influence the decision-making process for prospective home buyers,” it added. 

Six real estate associations including Builders Association of India, Chennai Southern Builders Association, Singara Chennai Builders Association  have jointly come together and listed a set of appeals to the government. 

The appeals include revisiting the existing order on stamp duty charges and registration fees, proposing a thorough review of the current fee structure considering the concerns raised by industry stakeholders, ensuring alignment with current market conditions and fair valuation among other demands.

Leave a Comment