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 ₹25 lakh across the city, official sources said on Wednesday.
After the hike, the transfer duty will be 4 percent for men and 3 percent for women buyers.
The decision taken by the unified Municipal Corporation of Delhi to hike transfer duty by 1 percent on properties priced above ₹25 lakh across the city will put an additional burden on buyers and adversely impact transactions in the secondary property market, according to real estate consultants.
Commenting on the development, Amit Goyal, CEO, of India Sotheby’s International Realty, said, “We are surprised by the decision of the unified MCD to increase transfer duty by 1 percent on the purchase of properties priced above ₹25 lakh at this juncture. This move puts an 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 jeopardize 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 the 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 ₹25 lakh.