Real Estate News: Buoyant Real Estate Market Supports 34% Increase in FY22 Stamp Duty Collection

The strong real estate sales momentum seen across the country is helping all state governments generate higher revenues through the collection of stamp duty on the registration of real estate transactions.

The cumulative collection of revenue from Stamp Duty and Registration Fees (SD&RC) from 27 states and one union territory of Jammu and Kashmir in India was recorded at over Rs 1.71 lakh crore in the 2021-22 financial year, up 34% from a year ago, showed data analyzed by

.

The average monthly revenue collection in these states and union territories during the financial year rose to Rs 14,262 crore from Rs 10,646 crore in the previous year.

In terms of absolute revenue figures, Maharashtra topped the tally with the largest collection of state revenue from Stamp Duty and Registration Fee (SD&RC) at Rs 35,593 crore. The state, which has Mumbai and Pune, India’s largest and most expensive real estate market, among its key cities, contributed 21% of the country’s overall SD&RC revenue.

“There is no doubt that the residential real estate sector has seen a remarkable revival in FY22. Nevertheless, it is important to note that the average growth over the past two years has been almost 15% Given that interest rates have bottomed out, tax incentives have expired, inflation is high and economic uncertainty is also high, it is unlikely that the performance for the year 22 in the residential property market repeat next year,” said Nikhil Gupta, Chief Economist, Motilal Oswal Financial Services Ltd.

The Reserve Bank of India’s decision to hike the repo rate by 50 basis points earlier this week, taking the cumulative rate hike to 90 basis points in less than 40 days, is expected to impact the pace of growth in the demand for properties and the actual conversion into sales.

While the recovery in home sales may not see a sharp decline, at least for now, given strong pent-up demand, growth momentum is likely to slow, experts say.

Following the surprise repo rate hike in May, mortgage rates have already started to rise from all-time lows which have helped major real estate markets rise above pre-Covid levels and record losses. record sales.

The resurgence of the residential property market amid the outbreak of the pandemic has so far been driven by low interest rates and stamp duty reductions and incentives offered by developers.

Uttar Pradesh is ranked second with revenue of Rs 20,048 crore from SD&RCs with a 12% contribution to overall collection. Uttar Pradesh saw a 22% increase in revenue from Rs 16,475 crore in 2020-21.

Tamil Nadu is ranked third with Rs 14,331 crore with an 8% contribution to the overall revenue generated by the country. The state saw a 23% increase in revenue in 2021-22.

Karnataka and Telangana are ranked fourth and fifth on the SD&RC table with revenues of Rs 14,019 crore and Rs 12,372 crore, respectively. From a year-over-year percentage growth perspective, Telangana saw the highest percentage increase at 136%, followed by J&K at 88%, Sikkim at 78%, Nagaland at 51%, Haryana with 47% and Gujarat with 41%.

Seven states, namely Telangana, J&K, Sikkim, Nagaland, Haryana, Gujarat and Maharashtra have seen an increase of over 40% in their revenue collection from SD&RCs.

Penny D. Jackson