Hyderabad, September 23: With the hike in stamp duty on various property deeds receiving severe opposition from the real estate, the state government took a U-turn making partial changes in the orders. The stamp duty on development-cum-general power of attorney (DGPA) will continue to be at the existing one per cent. Though the agreement-cum-general power of attorney (AGPA) and agreement of sale (AOS) deeds will attract five per cent stamp duty, the amount will be adjusted at later stage during sale.
The revenue department took the decision following severe opposition from the real estate developers and builders. During last week, the state government issued orders withdrawing its earlier orders which reduced stamp duty on DGPA, AGPA and AOS from five per cent to one per cent. As a result, the real estate developers were supposed to pay five per cent stamp duty on the property deeds in addition to the stamp duty of five per cent at the time of sale of the property. However, now the amount will adjusted during the sale.
The revenue officials claimed that the stamp duty was hiked only to encourage the sale of property as many people were misusing the provision for less stamp duty on DGPA, AGPA and other agreements without registering their agreement properly. “This is causing huge losses to the government exchequer. Though our intention is good, the developers approached us stating that it would become a burden for them to pay stamp duty twice for the same property. Hence, we issued a clarification to earlier orders stating that the five per cent hike in stamp duty is applicable only to sale agreement-cum-GPA,” said a senior officer in the registration and stamps department.
However, Andhra Pradesh Real Estate Developers’ Association (APREDA) president P Prem Kumar told Express that the stamp duty hike on sale agreement-cum-GPA is still a burden on developers as they have to pay the stamp duty at once for outright purchase of the land. “Instead, the government should have permitted one per cent stamp duty for projects which are completed within a specific timeframe. Though the amount will be adjusted at a later stage, paying such huge amounts towards stamp duty at one go will be a burden for developers,” he said.
According to an estimation, only 10-15 per cent of the developers in the state particularly in Hyderabad, are going ahead with their projects despite low response from buyers. Industry sources said that these developers despite having sound financial backup, are finding its hard to pool in large amounts where such hike will be a burden for them. Meanwhile, the increase in stamp duty on gift, release and settlement deeds from one per cent to three per cent will remain at three per cent.
–Agencies