Karnataka Considers 1% Stamp Duty Hike to Bridge ₹7,00 Crore Q1 Property Revenue Shortfall in Bengaluru
Facing a 35% drop in Q1 property registration revenue (₹4,556 Cr vs ₹7,000 Cr target), Karnataka is weighing a 1% stamp duty increase—raising effective rates from 6.6% to 7.6%—to recover lost funds. Experts caution that platform glitches and e‑Khata issues, not tax rates, are the true culprits.
Karnataka Eyes 1% Stamp Duty Hike to Recover Q1 Property Revenue Shortfall
The Karnataka Government, led by CM and Finance Minister Siddaramaiah, is considering a 1% increase in stamp duty, lifting the total transaction cost from 6.6% to 7.6%, to plug a significant revenue gap in property registrations.
What’s Driving the Proposal?
• Major shortfall: Property registration collections fell by ~₹2,444 Cr in Q1 (₹4,556 Cr realized vs ₹7,000 Cr target), a 35% deficit.
• Historic low duty rates: Karnataka charges the lowest stamp duty among its neighbors, except Andhra Pradesh. Tamil Nadu stands at 11%, Maharashtra at 7%.
Counterarguments from Real Estate Experts
• Credai’s viewpoint: T Bhaskar Nagendrappa argues the issue lies with e‑Khata mandates and Kaveri portal glitches, not tax rates. He believes fixing tech and procedural issues would be more effective than raising duties.
• Guidance value hike impact: With a 39% jump in guidance values in 2023, adding stamp duty increases would further burden buyers and may stifle real estate growth.
Implications at a Glance
Impact AreaEffect of 1% Duty HikeExpert Viewpoint
Government RevenueBoost expected; helps meet ₹28,000 Cr annual targetMay provide short-term relief
HomebuyersAdditional costs on top of guidance value hikesCould deter new buyers
Real Estate SectorPotential slowdown in registrationsFix platform issues instead
System ReliabilityIrrelevant to portal problemsNeeds tech overhaul
What Happens Next?
Siddaramaiah reviewed Q1 performance on June 18 and awaits recommendations. A final decision will be taken after consensus between the Revenue and Stamps & Registration departments.
Investor & Buyer Guidance
1. Factor in the potential rise in upfront transaction costs.
2. Monitor e‑Khata and Kaveri portal performance—delays could worsen.
3. Engage real estate agents or legal advisors for guidance.
A 1% stamp duty hike may help Karnataka recover short-term revenue, but experts emphasize that addressing the root causes—digital infrastructure failures and procedural delays—could be a smarter, sustainable strategy.
For editorial changes or queries regarding this article, please contact us at 8197943006 or email corporate@proppulse.ai. We’re here to assist you with all your home loan and property finance questions.
SOURCE: TIMES OF INDIA
