In a landmark decision set to benefit thousands of apartment owners, the Odisha government has dramatically simplified the registration process for common areas in housing complexes. This move resolves a protracted deadlock that had stalled property registrations across the state for years.
The Stumbling Block: A Costly 5% Stamp Duty
The root of the problem lay in the Odisha Apartment (Ownership and Management) Act, 2023. This legislation mandated that developers transfer ownership of common areas—like corridors, lifts, staircases, and community halls—to the Association of Allottees upon the first sale. However, this transfer attracted a hefty 5% stamp duty based on the market value of these shared spaces.
This financial burden proved to be a major roadblock. For many resident associations, arranging funds to pay this substantial upfront cost was prohibitive. Consequently, the registration of these common areas was often delayed or left incomplete. This, in turn, created a legal limbo, preventing individual apartment buyers from fully registering their own units because the status of the shared property remained unresolved.
The Game-Changing Reform: A Fixed Fee of Rs 50,000
To break this impasse, the state government has taken decisive action by amending the Indian Stamp Act, 1899. A new clause has been inserted that introduces a fixed stamp duty of just Rs 50,000 for the registration of common areas and facilities. Crucially, this fee is now independent of the property's total market value.
It is important to note that individual homebuyers will continue to pay the standard 5% stamp duty on the value of their specific apartment, which includes their proportionate share in the common areas. The massive reduction in cost is specifically for the resident associations, making the process financially viable.
"This reform removes a major hurdle in apartment ownership and empowers residents to take legal control of their shared spaces," stated a senior official from the housing and urban development department.
Unlocking Registrations and Strengthening Rights
Officials anticipate that this single move will unlock thousands of pending registrations that were stuck due to the earlier financial barrier. The reform is expected to boost transparency in real estate transactions and significantly strengthen the legal standing of apartment associations. With clear ownership of common areas, associations can better manage, maintain, and make decisions about their shared premises.
This amendment to the Stamp Act follows another supportive step taken in December 2023. On December 18 last year, the Revenue and Disaster Management Department issued a notification amending the Registration Act, 1908. This notification fixed a consolidated registration fee of Rs 20,000 for the transfer of common areas to the Association of Allottees.
Together, these amendments to the Stamp Act and the Registration Act create a streamlined and affordable pathway for compliance under the Odisha Apartment Act, 2023.
Real estate expert Bimalendu Pradhan highlighted the combined impact, saying, "The fixing of the fees for registration of common areas under the Registration Act a few days back and the decision in the Stamp Act now will lead to smooth registration of apartment projects to a large extent." This long-awaited clarity and cost reduction bring major relief to the state's real estate sector and its residents.
