Rise in stamp duty will have negative effect on property deals
By Accommodation Times Bureau
New Delhi: The apex court has ruled that, “the state can fix higher stamp duty on property transactions done through power of attorney vested in an outsider, as against such power executed through one’s blood relatives like father, mother and wife.”
The bench of justices comprising R M Lodha and H L Gokhale said such classification cannot be termed as unconstitutional as the government can adopt differential stamp duties to check evasion and sale transactions resorted through and for extraneous considerations.
The apex bench has maintained the appeal filed by the Madhya Pradesh Govt. challenging the state high court’s decision to quash Clause(d), Article 45 of Schedule 1-A of the Indian Stamp Act, 1899 which was brought in by the Indian Stamp (Madhya Pradesh Amendment) Act, 2002 Act) as unconstitutional being violative of Article 14 (equality clause) of the Constitution of India.
Following to hike in stamp duty when asked to realtors they said, “The hike in property tax and stamp duty at this juncture is definitely going to negatively affect both the property selling and rental market. At current price levels, combined with high interest rates and slower economic growth, people will find this increase as further squeeze on their home buying budget. The same factors might lead to property owners reducing the rentals on their property to absorb a bit of the hike in the stamp duty on leave and license agreements. The increase in both property taxes and stamp duty tends to shift the market favourably towards the leave and license sector. In this case neither has been spared, so people will opt for the lesser pinching of the two, i.e. they will opt for more leave and license transactions,” Mr. Prashant Maharaj, CEO, Property Partners said.