The Karnataka government has recently taken a major decision that will directly affect the pockets of the general public. The government has increased the registration fee of property from 1% to 2%.
This step has been taken to increment the state's income, but its greatest effect will be on homebuyers. Those who are considering buying a modern house or arriving will presently have to pay twice the charge from before.
This altar will lead to a coordinate increment in the add up to take a toll of the property. Karnataka property registration fee increase. The government says that this choice has been taken to fortify the financial condition of the state and to advance straightforward transactions. However, conventional citizens accept that this choice will put them beneath more financial weight.
What are the new changes?
Prior, a charge of 1% was to be paid for enlisting a property in Karnataka. For example, if an individual bought a property worth 40 lakh, he had to pay an enlistment charge of 40,000. But presently the same individual will pay an expense of up to 80,000 on the same property. That is, the fee has directly doubled.
Also, the stamp duty has been kept at 5% as before. This means that now there will be an additional increase of about 1% to 2% in the total expenditure while buying a house or land. This increase will also have an impact in smaller cities and towns, where common people buy houses from their savings.
Why did the government raise taxes?
The Karnataka government says that the revenue from real estate transactions in the state has remained stagnant over the years. The government hopes that the increase in registration fee will lead to a direct increase in revenue.
This will generate funds for development works and infrastructure. The government has also said that many times the sale of property was shown at a lower price, leading to loss of tax. Now with the higher fee, people will enter the true value of the property. This will prevent fraud and illegal transactions.
The main objectives of the government
- To increase the income of the state.
- Transparency in real estate transactions.
- Ensuring tax on the real value of the property.
- Promoting digital records and online registration.
Impact on homebuyers
The biggest impact of this decision will be on those who are buying houses for the first time. Already, the prices of land and flats are rising. Now with the increase in the registration fee, the total cost will increase further. Many people who used to find it difficult to balance EMI and down payment, now it will be more challenging for them.
Many experts believe that this will increase the burden on the middle class. Where earlier people used to put some amount from their savings in the registration, now they will need an additional amount. As a result, many people decide not to buy a home.
The main impact
The total value of the house and land will increase. Borrowers will have to pay extra. The demand for real estate may decline for some time. Buyers will have to arrange more cash for property registration.
The opinion of developers and builders
Many real estate developers say the government should have taken this step gradually. Because increasing the fees twice at once can reduce the interest of buyers. Builders believe that this could slow down the sale of new projects.
In big cities like Bengaluru, property prices have already gone up sharply. Now with the increase in fees, buyers will take a decision thoughtfully. However, some experts believe that in the long run, this will bring transparency and stability in the market.
The government's view
The government believes that there was a need to reform the rules related to property in the state.
In order to promote Digital India campaign and e-governance, it is now planned to link every registry with an online process. The additional revenue generated from the registration fee will be spent by the government on urban development, roads, and housing projects.
The state government has also indicated that property registration will be made more easy and transparent in the future so that people get rid of brokers and the lengthy process.
Comparison of existing rates
The percentage of the increase in the previous fee now. Property Registration Fee 1% 2% 100% Stamp Duty 5% 5% No Change Total Fee (Estimated) 6% 7% 1% Increase. If the value of a property is 50 lakh, then earlier the total tax and fees together had to pay about 3 lakh. Now the same will increase to close to 3.5 lakh.
Impact on real estate market
The impact of this increase will be seen on the real estate sector across the state. Earlier where people used to buy land for investment, now they can stop a little. Developers may also face delays in the sale of their projects.
However, experts believe that this effect will be short-term. In the long run, it will stabilize the market and improve government revenues. Also, this step will motivate people to get the property registered with the correct valuation.
Opinion of the public
People say that the cost of living has already increased. Prices of fuel, electricity, and rent are constantly increasing. Now if the cost of buying a house will also increase, then the dream of housing will go away for many people.
Many have criticised the decision on social media.
He says the government should have first come up with a relief plan for low-income groups, such as
- For first-time home buyers
- Low registration fee in rural areas
- Exemption for senior citizens or women
What do real estate experts say?
According to real estate analysts, this decision is an effective way to increase revenue for the government. But the government will also have to see how it affects the purchasing power of the people.
- If buyers will be less, then there may be a risk of recession in the market.
- Some experts also believe that with this increase, if the government simplifies the digital registration system, people will be ready to pay extra fees.
- Because then they will get both time and convenience.
What the government should do?
A special relief package should be given to people with low income. In rural areas, the registration fee should be kept low by a few per cent. The online registration process should be made faster and easier. Strict vigilance should be maintained to prevent illegal property transactions.
Conclusion
Increasing the registration fee from 1% to 2% in Karnataka is a big and effective decision of the government. While this will increase the income of the state, the common citizens will have to face additional expenses. Karnataka property registration fee increase. Its immediate impact on the real estate market will be seen, but in the long run it will make the market transparent and orderly.
It is important for the general public to keep a complete account of all expenses before buying any property. If the government eases the registration system with this increased fee, the move could prove to be a positive direction for the state's economy.
