Builders are feeling relieved as chief minister Manohar Parrikar announced in his budget that steps would be taken to remove anomalies in respect of stamp duty payable, while executing a power of attorney given to a builder for development and sale of an immovable property.
PANAJI
As of now, the stamp duty is payable twice – once when a builder takes a piece of land from an owner on power of attorney basis and second when he develops that land as villas and flats and sells them to the final buyer.
This double burden of stamp duty increases the cost of real estate and totally defeats the very purpose of a power of attorney transaction.
Chinmay Borkar, director, Akar Realty, said, “Before 2013, a builder didn’t really have to buy a piece of land. He could take a power of attorney from the landlord, build a project, and transfer the ownership of land from the seller to the co-operative housing society. The stamp duty was payable only when flats or villas were sold to the final buyer.”
He continued, “From 2013 onwards, the state government levied a stamp duty even when power of attorney is executed. So, you pay stamp duty while taking land from an owner on power of attorney basis and then there’s a stamp duty to be paid even when flats are sold to buyers. In a nutshell, there is a double burden of stamp duty. This must go.”
Builders complained that the tax structure in Goa is such that taking land through power of attorney route is as good as buying land, as stamp duty is payable on both the transactions.
KulaSekhar, designated partner, Milroc, said, “The real-estate industry has been requesting the government to see if the double burden of stamp duty can be taken care of. At the moment, the situation is such that even if a builder takes a piece of land through power of attorney, stamp duty is payable as if there was an agreement of sale between him and the land-owner.”
Naturally then, the builders are expecting Parrikar to do away with stamp duty payable at the time of execution of the power of attorney between the owner of land and the builder.
Builders also added that the industry has been going through a slump and reducing taxes will give a fillip to the sector. Meanwhile, Parrikar has brought down the combined levy of stamp duty and registration fees by 0.5% on real-estate transactions valued upto Rs 50 lakh and by 1% on transactions of more than Rs 50 lakh. This too is expected to ease down the slowdown in real-estate sector a bit.
