Hike will put housing out of reach for all

Hike will put housing out of reach for all
The Times of India

Bangalore: It couldn’t have come at a worse time. The state government has chosen to raise the guidance value on property just when every other cost associated with property development has gone up phenomenally, making housing in Bangalore out of reach for most. And understandably, developers are furious.
“The industry is being strangulated,” says A Balakrishna Hegde, president of Karnataka Ownership Apartments Promoters’ Association (KOAPA) and MD of Chartered Housing. “Interest rates and construction costs are going up sharply, the Centre has just introduced a punishing service tax on commercial real estate leasing, the state has imposed a stamp duty on joint development and every state department is busy raising their rates for all property related work almost daily. And now comes this guidance value increase, which will significantly raise stamp duty and registration costs.”
J C Sharma, MD of Sobha Developers, says customers are already paying too much, more than 30%, by way of governmental taxes and cesses when they buy a property. “Housing is a basic need. You have to make it affordable. This guidance value increase goes against that objective,” he says.
Sharma says the government should at least now reduce the stamp duty and registration rates. The National Housing & Habitat Policy of 1998 had strongly recommended that states bring down stamp duty rates to 2-3%. But the rate in Karnataka remains as high as 8.5% and the registration charge is an additional 1%.