Property developers in Gujarat are urging the state government to grant stamp duty exemptions for homeowners in redevelopment projects. Echoing a recent Bombay high court ruling, they argue that homeowners are not buying new homes, hence should not bear the burden of additional stamp duty. This move, they believe, could reenergize the stalled redevelopment sector by reducing financial pressures on existing homeowners, especially amid recent jantri rate hikes.
In a recent move echoing the Bombay High Court's ruling, property developers in Gujarat are advocating for stamp duty exemptions for homeowners involved in redevelopment projects. This call for action aims to stimulate the redevelopment sector by alleviating the financial burden on existing owners.
The Bombay High Court previously stipulated that if the stamp duty for a redevelopment agreement is paid, it cannot be charged again for individual units. Bolstered by this judgment, developers in Gujarat have raised the issue with the state government, arguing that homeowners who acquire a new house after redevelopment shouldn't be subject to further stamp duty.
The Confederation of Real Estate Developers' Associations of India (CREDAI) is spearheading this initiative. Their reasoning stems from the premise that these homeowners are not technically purchasing new homes, but are merely beneficiaries of the redevelopment.
The Bombay High Court judgment in February had previously quashed circulars in Maharashtra, which insisted on additional stamping of a Permanent Alternate Allotment Agreement (PAAA) between the developer and society members, despite the development agreement already being stamped. The court clarified that stamp duty should not be levied twice as it covers the reconstruction of all units in the society building.
The recent hike in the jantri rate has further stalled many redevelopment projects in the state. Developers argue that the doubling of charges for paid FSI has rendered projects economically unviable. The proposition to exempt existing homeowners from paying stamp duty on redevelopment projects represents a strategic move by Gujarat developers to revive the stagnant redevelopment sector. If successful, this initiative could create a significant shift in the real estate industry, benefiting homeowners, developers, and the overall housing market.
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