The stamp duty cut for documents which complete registration between 9th July 2021 to 30th October 2021. Coupled with a 10% reduction in circle rates, the fence sitters are now getting back to the market to seal the deals.
Buoyed by the stamp duty cut announcement, 6,861 units were sold in Kolkata’s primary residential market in Q3 2021, the report mentioned.
“Government’s step to provide a demand stimulant at the opportune time. Much like most other cities, the sales momentum had seen a significant drop in the early part of the pandemic, therefore, this stimulant was critical to give the market the growth. We expect this move will further propel fence sitters to make their purchase decisions,” said Swapan Dutta, Senior Branch Director, Kolkata, Knight Frank India.
Table 1: The stamp duty cut applicability for different ticket sizes
|Jurisdiction||Ticket size of INR 1 crore & below||Ticket size of above INR 1 crore|
|Stamp Duty Rate before the rebate||Stamp Duty Rate after the rebate||Stamp Duty Rate before the rebate||Stamp Duty Rate after the rebate|
|Corporation (Kolkata/Howrah Area)||6%||4%||7%||5%|
|Municipal Corporation/Municipality/Notified Area||6%||4%||7%||5%|
|Other than those included above||5%||3%||6%||4%|
Source: Directorate of Registrations and Stamps Revenue, Government of West Bengal; Knight Frank India Research
During the Q3 2021 (July-September) period, a total of 15,160 residential sales deeds were registered in KMA, marking a 122% year-on-year (YoY) growth over Q3 2020. In 2021, the months of July, August and September noted a YoY increase of 39%, 268% and 80% over the respective months of 2020.
Since the stamp duty cut was only applicable for 22 days in July, the real upward momentum came in August 2021 before slowing down in September 2021 due to the onset of the inauspicious Shradh period of 11 days beginning from September 20th, 2021. Due to a period of heightened momentum in registration of residential sales deeds in August 2021, it constituted 48% of the quarterly total.
The highest percentage jump has been observed in the unit sizes of 1,000 sq ft and above. During Q3 2021, apartments above 1,000 sq ft witnessed a massive 403% jump in registrations over Q3 2020.
“The growth in the mid and high segment has also reaffirmed the fact that a minor push has helped the market rejuvenate itself. The significant growth in homes larger than 1000 sf as well as in the high value locations of south Kolkata is largely since the mid to high income category buyers were looking at a push. With many other factors like growth in household income, stability in growth of the economy as well as historic low home loan interests has augured well for the sector,” he said.
For the first nine months of the calendar year of 2021, 35,149 residential sales deeds were registered, marking a 102% annual increase over the same period in 2020. Because of the lockdown during the first wave of COVID-19, a strong YoY change was witnessed in May 2021 which is largely attributed to a lower base than any strong activity in sales registration.
However, to keep the sales momentum the state government have to consider extension of this rebate till at least December 31st, 2021. Especially, after the Durga Puja celebrations conclude in mid-October 2021. The momentum in new home sales and fresh supply needs to be sustained as it is vital for the sector to attract fresh investments.