In a significant move aimed at simplifying property registration and reducing financial burdens on housing societies, the Odisha state cabinet has approved a major revision to stamp duty charges for common areas in apartment complexes.
Stamp Duty Slashed for Common Areas
The decision, taken during a cabinet meeting on Friday, introduces a fixed, lower stamp duty fee for registering common areas and facilities in favour of an association of allottees. The new rule fixes this charge at a flat rate of Rs 50,000. This marks a substantial departure from the previous system, where such associations were required to pay stamp duty calculated at 5% of the value mentioned in the deed of conveyance for these shared spaces.
Relief for Housing Societies, Status Quo for Individual Buyers
This reform is specifically targeted at the collective bodies that manage apartment buildings. Common areas typically include lobbies, staircases, lifts, terraces, gardens, and clubhouses. The high ad-valorem duty was often seen as a procedural and financial hurdle for these societies during the registration process.
It is important to note that the standard 5% stamp duty regime will continue to apply for individual apartment buyers registering their specific units. The new flat fee is exclusively for the conveyance deed that transfers ownership of the shared common facilities to the residents' welfare association.
Expected Impact on Real Estate and Homebuyers
This policy change is expected to have multiple positive effects on the real estate sector in the state, particularly in urban centers like Bhubaneswar. By making the registration of common areas more affordable and predictable, it streamlines the final leg of the apartment handover process. This can lead to faster formation and legal formalization of apartment owners' associations, which are crucial for the maintenance and governance of residential complexes.
Industry experts suggest that while individual buyers' costs remain the same, the overall health and management of apartment buildings will benefit. A properly registered association can manage funds and upkeep more effectively, ultimately enhancing property values and living conditions for all residents. The move is seen as a progressive step in urban housing policy, aligning with efforts to promote transparent and efficient community living in multi-dwelling units.
