New Delhi- Buying property in Delhi is set to get expensive as the unified Municipal Corporation of Delhi has decided to hike transfer duty by 1 percent on properties priced above Rs 25 lakh across the city, official sources said on Wednesday.
Officials said after the hike, the transfer duty will be 4 percent for men and 3 percent for women buyers. The move is aimed at improving the financial health of the municipality which has been hit severely in past years especially due to COVID-19 pandemic.
It is the first major decision after the three civic bodies – north, east and south – were unified last month. The decision was taken in a meeting on Tuesday where a proposal to increase the transfer duty by 1 percent was moved.
The proposal was passed by the special officer of the Municipal Corporation of Delhi (MCD), who has been entrusted with the power to run the civic body till the new House is elected.
“A proposal was moved before the special officer in capacity of the standing committee to hike transfer duty on properties priced above ₹ 25 lakh by 1 per cent. The proposal was approved by the SO (special officer). After the hike, transfer duty will be 4 percent for men and 3 percent for women,” official sources told PTI.
Currently, the transfer duty on sale and purchase of property in the national capital is 3 percent for men and 2 percent for women buyers.
The move comes in the backdrop of the poor financial condition of the civic body as it has been struggling even to pay salaries of its employees.
“The move will increase revenue and strengthen MCD’s coffers which will be used for overcoming the financial challenges and providing best services to the people,” officials said.
Authorities said the hike in transfer duty will affect only those buyers who are to purchase property having the registered value above ₹ 25 lakh.
Properties are divided into eight categories, A, B, C, D, E, F, G and H, depending on their area location and the Delhi government collects stamp duty on sale and purchase of properties.
Posh and upscale colonies fall in the category of A and B such as Golf Links, Vasant Vihar, Sunder Nagar and Jor Bagh. Middle income group neighbourhoods fall in the C and D category areas which include localities like Lajpat Nagar, Alaknanda, Bhogal, Amar Colony, among others.
Localities such as Geeta Colony, Anand Parbat, Seikh Sarai fall in E, F, G, H category areas.
Civic officials said transfer duty is collected in addition to the stamp duty. The hike will be applicable only on transfer duty and it will not impact buyers aiming to purchase properties priced below Rs 25 lakh.
Hike To Put Additional Burden On Property Buyers: Realty Consultant
The decision taken by the unified Municipal Corporation of Delhi to hike transfer duty by 1 per cent on properties priced above Rs 25 lakh across the city will put additional burden on buyers and adversely impact transactions in secondary property market, according to real estate consultants.
Buying property in Delhi is set to get expensive as the unified Municipal Corporation of Delhi has decided to hike transfer duty by 1 per cent on properties priced above Rs 25 lakh across the city, official sources said on Wednesday.
After the hike, the transfer duty will be 4 per cent for men and 3 per cent for women buyers.
Commenting on the development, Amit Goyal, CEO, India Sotheby’s International Realty, said, “We are surprised by the decision of the unified MCD to increase transfer duty by 1 per cent on purchase of properties priced above Rs 25 lakh at this juncture. This move puts additional burden on the property buyers.”
“At a time when home loan interest rates have already started inching up and the Reserve Bank has indicated further increase in policy rates to tame the stubbornly high inflation, the decision to enhance transfer duty will jeopardise the much-needed recovery of the sector,” he added.
Ashutosh Kashyap, Director, Advisory Services, Colliers India, said the proposed increase in the transfer charges, will increase the incidence of transaction cost on transfer cases.
“This move would imply an additional landed cost for secondary purchase. This move will marginally add to the lucrativeness of property purchases in the primary market from the developer, which might slightly sweeten the purchase in the primary market,” he said.
However, Kashyap said the money collected on account will imply better funds with urban local bodies to undertake betterment of infrastructure and civic services within the city.
Currently, the transfer duty on sale and purchase of property in the national capital is 3 per cent for men and 2 per cent for women buyers.
In Delhi, properties are divided into eight categories A, B, C, D, E, F, G and H depending on their area location and the Delhi government collects stamp duty on sale and purchase of properties.
Posh and upscale colonies fall in the category of A and B such as Golf Links, Vasant Vihar, Sunder Nagar and Jor Bagh. Middle income group neighbourhoods fall in the C and D category areas which include localities like Lajpat Nagar, Alaknanda, Bhogal, Amar Colony, among others.
Localities such as Geeta Colony, Anand Parbat, Seikh Sarai fall in E, F, G, H category areas.
Transfer duty is collected in addition to the stamp duty. The hike will be applicable only on transfer duty and it will not impact buyers aiming to purchase properties priced below Rs 25 lakh. (PTI)
